Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
New technology better grasps consumers' intent and returns results that are more relevant and current.
Retail giant Wal-Mart Stores Inc. last summer boosted conversions on Walmart.com by 20% after it debuted a new site search engine it built in-house, says Abhishek Gattani, a senior director on the engineering team of @WalmartLabs, the retailer's technology development arm. And the site search engine keeps getting better at returning the most relevant results—it analyzes customer interactions with it and fine-tunes the search results over time—as more shoppers use site search, he says.
"Search is like a treadmill, you have to continually innovate," Gattani says. "Owning our own search engine allows us to do that."
Every day his team runs experiments to solve problems with the site search engine's algorithms. For example, one current project is to improve searches that involve colors. When a shopper types "red polo shirt" into the search box, Walmart.com's search engine identifies the word "red" as a color describing the polo shirt. However, in some cases "red" may mean something else—for example, a search for Red Bull requires the engine to understand the customer is looking for an energy drink, not an actual red bull, Gattani says.
Every small tweak matters. "Site search is a crown jewel in e-commerce," Gattani says.
Most Walmart.com customers use it, he says, although he declines to disclose exact figures. For Wal-Mart, the technology is indispensable for driving sales—as demonstrated by the 20% lift in conversions—because it helps shoppers find exactly what they're looking for, fast.
Like Wal-Mart, other e-retailers find site search critical in getting shoppers to purchase. Consumers who use an optimized site search system convert 4.7 times more often than visitors who don't use site search, according to research from e-retail trade group Shop.org. Optimized site search refers to search tools that retailers have honed around their merchandising and shoppers' needs, for example customizing the navigation options or featuring top products in results.
"Consumers are more likely to buy if they're given the right content," says Brian Beck, a senior consultant at e-commerce advisory firm FitForCommerce. "It's imperative for retailers to pay attention to that and create increasingly relevant experiences on their sites—and site search can provide a great way to do that."
Between 11% and 15% of consumers begin shopping a web site by typing into the site search bar, according to web site usability analysis company Measuring Usability LLC. The research firm studied the interactions of 1,500 consumers across a variety of e-retail, mobile phone carrier, car rental and automotive sites.
While few retailers have the resources to build their own engines in-house as Wal-Mart did, vendors now offer site search tools with sophisticated functionalities, Beck says. They generally charge $5,000 per month or less, he says, sometimes much less. For example, online tie seller NecktiesInStock.com, a retailer with less than $3 million in annual revenue, pays between $250 and $400 per month for site search and navigation technology from vendor SearchSpring, says the retailer's CEO Chris Cardi. SearchSpring bills according to the number of searches run each month.
Retailers report site search is highly effective at helping consumers find what they want and that it leads to sales. Accordingly, 98% of respondents in a recent survey of 148 senior retail executives by e-commerce consultancy The E-tailing Group Inc. called keyword search the most effective merchandising tool on their web sites, and 85% said enhancing site search was among their top two merchandising priorities. Whether big or small, e-retailers are using site search to serve customers' needs and drive sales, while also serving their own business requirements.
Online infant gear seller Bambi Baby Store upgraded its site search engine in March with technology from vendor Celebros Inc. Among customers using site search, the retailer boosted revenue by 128%, average order value by 25%, conversions by 65%, and the number of transactions by 82% over a three-month period compared with the same period in 2012, says the retailer's CEO, Enelio Ortega. The technology costs Bambi Baby about $900 per month.
Celebros uses a semantic search algorithm. That means shoppers can type in a string of words as they would when speaking, such as "brown baby beds," and Celebros' tool interprets that query in context, returning baby beds that are brown. Before, Bambi Baby had a text-based site search tool that returned products tagged with one or more of those keywords. "With that, the entire search results gave products based on the individual keywords, 'brown,' 'baby' and 'bed'—nearly 3,000 results versus 300 to 400 [with semantic search]," Ortega says.
Filtering out irrelevant results can be the difference between a shopper finding the product she wants and her not finding it and leaving the site, Ortega says.
In addition, when customers begin entering a query into Bambi Baby's site search bar, the system suggests popular search terms in a drop-down box. It also displays beneath those text phrases a handful of thumbnail product images with short descriptions. For example, by the time the consumer types "stroll," the search engine has suggested five top phrases including the word "stroller" followed by the names and pictures of five popular strollers. Customers who click one of the images convert 50% more often than those who do not click on a thumbnail, Ortega says.
These site search enhancements help BambiBaby.com sell more. Compared with shoppers who do not enter a query in the site search bar, those who do convert 500% more often, have 45% higher average order values, view 300% more pages, spend 400% more time on the site and are 90% less likely to leave the site without viewing more than one page, he says.
Bambi Baby adjusts the rules for how its site search engine displays results to help promote particular products and improve its margins, Ortega says. For instance, it shows only mattresses that are in stock and available for immediate shipping, although it offers È È other special-order bedding options. (Customers can still find those options through the site navigation or by searching for the exact product name.)