Retailers Restock the Online Shelves
Online shopping at home and at work is now so commonplace that merchants are heading back to their retailing roots and
using technology to create a genuinely branded shopping experience.
Some are dubbing it e-commerce 3.0. Instead of following the Amazon model, the trend involves
exploiting the penetration of broadband to create truly differentiated retail brands. Consumers have more customized options than ever and are getting access to richer product information through
interactive video demonstrations and product reviews, many of which are consumer-generated.
"The value in video is demonstration," says Doug Mack, CEO of Scene7, a Web
development firm that produces online content for QVC.com and other e-tailers. "Retailers are trying to figure out the best interactive experience at the best possible cost."
Video is a natural for QVC, as the company already shoots footage everyday for its home-shopping TV business. Robert Myers, senior vice president for QVC, says the QVC Web site
adds up to 30 new videos each day. Video works particularly well with beauty products and QVC gets a higher conversion rate on products it complements with a video.
Wal-Mart, which unveiled a new Web design in late October as part of a drive to upgrade its retail brand, plans to stream video fashion shows. The mainstream retailer's newfound attention to its
online presence comes as its competitors start hitting the $1 billion sales mark in the channel. Federated Department Stores announced it would spend $130 million over the next two years to upgrade
its e-commerce experience.
E-commerce sales are projected to grow roughly 20 percent per year through 2010, according to multiple researchers. Because the business is
maturing, the growth must come from retaining existing online customers and getting them to buy more, not just by attracting new ones.
Today's online shopper is more
sophisticated and ready for a richer experience. In the mid-1990s, people bought mostly books and CDs online, but apparel and furniture are now among the fastest-growing purchase categories. Nike this
year conducted a vast redesign of Nike.com, which involved creating a much more visually arresting site using Flash technology. To ensure the site is readable by search engines, a complete backend
skeleton site was created in HTML to feed the spiders and yield optimal organic search engine results.
Nike added functions that enable consumers to search for products
by gender, and a "zoom" function allows the product to take over the entire shopping screen. The consumer controls how the site is shopped, and shoppers get critical information, such as product
availability, right away instead of being surprised at the checkout.
Kids' retailer Gymboree, meanwhile, allows online shoppers to set up the merchandise criteria to
define their own store - one that refreshes with each new visit based on what's new and what's in stock. Parents with more than one child can create a "My Gymboree" for each and save time shopping on
future visits. Online retailers can be expected to build more features and functions like these in 2007 and beyond.