In September, I attended Shop.org’s Annual Summit, where I moderated a roundtable discussion and attended many industry analyst presentations. One session that has stayed with me ever since is the keynote address from Forrester’s Sucharita Mulpuru. Her address, “The State of Retailing Online,” outlined what online retailers are doing well in the current economy and why e-commerce continues to be a bright spot for the retail industry.

Why am I still thinking about her talk? I was really taken by her emphasis on the importance of live help strategies, and her declaration that live chat is “underutilized.” Sucharita inferred that although few retailers are actually using this live help solution, a majority of e-merchants do seem to understand its value because, according to Forrester’s State of Retailing Online 2009 report, 80 percent of retailers surveyed are planning to focus on live chat this year. But why are relatively few retailers actually using this live help solution?

Perhaps retailers understand the value on one level, but still don’t feel the urgency of adopting it themselves. Yet, at ATG, we consistently see the results of implementing a solution that gives online shoppers the instant ability to have their questions answered or get more information before making an online purchase. A live help study we recently conducted at ATG showed that 52 percent of consumers said live chat would be “very/extremely useful when making an online purchase.” This ability to connect easily and directly with a store associate can spell the difference between an abandoned transaction and a completed purchase.

In these times when retailers are trying to pull out all the stops to maximize revenue this holiday season, we see that live chat can decrease Web site abandonment rates, provide consistent and optimal customer service and, perhaps most importantly, increase conversion rates.

If you are among the 80 percent of retailers who had planned to focus on live help this year, but haven’t done so yet, what’s stopping you? What do you plan to do to drive sales this holiday season? Are click to call or click to chat part of your Web strategy for the upcoming season? I’d love to hear your perspectives on this topic.

We came across an interesting post that was included on InternetRetailer.com, which discussed the e-tailing group’s recent findings from their customer satisfaction survey. The e-tailing group mystery shopped 100 retail web sites and scored merchants on 80 metrics split into three categories: execution of key pages (25 points), merchandising (43 points) and customer service tactics (32 points).

It was surprising to see that just eight out the 100 e-tailers included in the fourth quarter survey scored an 80 or above on a scale of 100, although, Lauren Freedman, president of the e-tailing group, noted that it can be quite difficult for merchants to excel across all three categories.

Considering these stringent requirements, we’d like to offer our congratulations to those eight merchants who have continuously shown their dedication to providing an exceptional experience to their customers, and offer a particular note of praise to the two ATG customers who received this distinction.

The eight retailers scoring an 80 or above along with their scores this year compared to last and the percent increases are as follows:

• Sears, 88.25, 67.90, 21.48%
• Golfsmith, 82.25, 75.50, 8.94%
• Frontgate, 80.75, 70.00, 15.36%
• L.L. Bean, 80.50, 76.00, 5.92%
• Discovery Channel, 80.50, 76.00, 5.92%
• Amazon, 80.50, 73.00, 10.27%
• Best Buy, 80.50, 68.50, 17.52%
• Orvis, 80.00, 75.50, 5.96%

Kudos to these merchants who are also committed to improving their customers’ experiences while shopping online. Keep up the great work.

In the newest installment of our Q&A series, we invited Kurt Peters to share his thoughts on the state of Web retailing today. Kurt is the editor in chief of Internet Retailer and is also the executive vice president of Vertical Web Media LLC, the magazine’s publisher. In addition to overseeing editorial content for Internet Retailer and InternetRetailer.com, he works closely with many of the biggest and brightest stars in Web retail, managing the Internet Retailer Conference & Exhibition each year as well as two special publications that are considered “go – to” sources: the Internet Retailer Top 500 Guide and the Guide to E – Commerce Technology.

ATG: What do you see as the “next big thing” in online retail? Is there anything you view as over – hyped or not quite ready for primetime?

Peters: The next big thing will be something we’ve seen developing already, though it is not very common: the breaking of the linear approach to navigating a web site. Until now, moving through a Web site has been a lot like looking through a book, magazine or catalog (which is natural, given how long humans have interacted in that fashion with a vehicle that contains content, i.e., scrolls, books, etc.). But the development of Web 2.0 approaches and technologies breaks that navigation open and allows the Web experience to become something completely different from what we’re all used to. In retail, that means shoppers will be able to view details about a product, compare products, match one product up with another, view reviews, and see what’s in the shopping cart, all without having to toggle back and forth between pages. That will make the experience more interesting and gratifying than what it is today.

The other next big thing: E – commerce everywhere. That has two aspects to it: E – commerce that does not take place on a computer, such as on mobile devices and TV. And e – commerce that takes place on Web sites other than retail sites – social networking sites, other content sites, and so on. Retailers will have to get used to – and figure out how to make the most of – the fact that consumers can and will buy when they’re in the mood.

Over – hyped: the notion that online retailers can maintain an infinite depth of product. That may be true for digital products (music, movies, books, software) but it is far from the case in hard products. There is a cost to maintaining hard inventory and retailers would be well served to correctly analyze the costs of storing, finding, packing and shipping hard products that result in only a few sales a year. It’s one thing to have episodes of the Mickey Mouse Club on a server to download to a consumer or written to a DVD on demand; it’s a completely different issue to have the Annette Funicello angora sweater in stock just for the person or two who might want to buy it each year.

ATG: What is the biggest challenge facing e – tailers today? The biggest opportunity for them?

Peters: The biggest challenge facing online retailers is the state of the economy. Online retailing has had a good ride so far, carried along first by the novelty, then by the convenience. The novelty is gone; the convenience remains. But as the economy gets worse, online retailing will face the same pressures that offline retailing faces: consumers looking for good prices. E – retailers will have to be hyper aware of their prices in relation to their competitors’ and make sure that the price they charge reflects value – value either in absolute terms (i.e., price) or in relation to whatever additional value a consumer gets from buying at that particular site. They also are going to face increasing competition from big chains who will be looking to online for sales. When they finally start to bring their big resources to bear, the nature of the game will change and everyone will need to be ready for competition to move to a whole new level.

ATG: Do you think that most retailers are in tune with what their customers want and/or expect?

Peters: It’s hard to generalize on this one. Numbers tell the story. The percentage of sales to repeat customers is a good indication of whether a retailer is in tune with its customers, as is overall sales growth. A couple of things that online retailers could be doing better and that indicate that they are out of tune with customer needs:

1) Site search. For all the attention that effective site search has received over the years – and it’s been a topic for a long time – a lot of site search is still really bad. For instance, I was looking for a dehumidifier for my basement recently, and when I searched at a certain site, I got room humidifiers along with dehumidifiers. At another site, when I searched on refrigerator, the first result was a small wine cooler – that seems like a mighty specialized result for the first listing on a broad term like refrigerator.

2) More responsive customer service. Some retailers take 24 hours after you’ve submitted an e – mail to answer it and some never reply at all. Some keep their 800 numbers hidden.

3) Better product descriptions. When I was in the market for a digital camera, I narrowed my search down to a few, and then did a Google search to find out more about each camera from the sites that were selling them. All the sites used the exact same language – obviously, the manufacturer’s wording – to describe the cameras. No site gave any indication that their people had any actual knowledge of the cameras. What’s the incentive for me to buy from any particular site? Such an approach provides no additional value to consumers and forces all decisions to be made on the basis of price.

ATG: What will be the hottest topic in Web retail in the next 6 months? The next year? The next five years?

Peters: 6 months: the economy; 1 year: the economy; 5 years: I hope not the economy, rather, how to create an experience compelling enough to move shoppers out of stores. That will require big leaps in helping the shopper find the product fast, giving the shopper enough information to replicate the touch – and – feel experience of the store and make the shopper comfortable buying ever more things online, and stellar execution of the order, including accurate, super – fast (by that I mean one day, maybe even less) delivery.

ATG: Given the current U.S. economy, and projections about the retail industry in general, should e – tailers expect a strong or weak holiday season?

Peters: Weak relative to previous years, but still stronger than offline. If the first half was any indication, consumer spending will grow much more slowly than in recent years – but online sales will outstrip offline sales and that will mean gains for online at the cost of offline. In the first half, total retail sales were up 2.8% while online sales were up 13.6% compared to a year earlier. We will probably see much the same pattern during the holidays, meaning Web – only retailers need to gear up for competition from huge offline competitors and offline retailers better get their online act together if they are going to capture any of those sales.

ATG: Anything else you’d like to add or comment on?

Peters: Retail chains need to gain a better understanding of the role of the Web. Most do not include Web site sales in same – store sales, but they should because doing so creates a fuller picture of the retailer’s operations and can paint a much different picture of a company’s financial status. In addition, the Web accounts for much of the growth at some chains. When chains fail to take that into account, they risk investing where the return is lower (stores) just because that’s what they’ve always done, and ceding the future of retailing to competitors who understand the importance of the Web.

[tags] Internet Retailer, online shopping, eCommerce, Ecommerce, economy, retail [/tags]

We just got our September issue of the E-consultancy.com newsletter and saw an interesting interview with Thomas Cook’s e-commerce director, Russell Gould, discussing the company’s efforts to increase online conversions. He offers his perspective on user reviews, video, co-browsing, and multi-channel trends he’s seeing.  And he talks about the importance of continual analysis in improving Thomas Cook’s customer experience. 

Retailers saw the lack of consumer satisfaction throughout August 2008. Compared to the satisfaction survey  from this past May, overall satisfaction dropped across all categories during the August 2008 cycle. While the highest customer satisfaction rating came from the area of product range / choice available on the Websites consumers shop on; the biggest drop in satisfaction was seen in response to queries.  One solution retailers can implement to improve satisfaction in response to queries is click to call and click to chat technology: more here.
[tags] retailers, e-commerce, eCommerce, online shopping, consumer, customer satisfaction [/tags]

Recently, the Pew Internet and American Life Project revealed survey results showing nearly half of Internet users conduct a search on a typical day, up from about a third in 2002. Search is fast approaching e-mail as the most popular thing to do on the Internet. 

We’ve all seen how search has dramatically shifted the landscape for national and local advertising – but how is it more broadly affecting online shopping? How is “the Google effect” changing the game for online retailers? 

The search engine has emerged as the most dominant user interface. As search becomes the primary entrance to your Web site, the visitor cares far less about your home page and reading your positioning statements, and far more about finding specific products or information. Your Web segmentation strategy must begin at the search engine, and cater to a far more granular range of segments than ever. 

Consumer tendency to “search first” rather than type in a Web store URL directly has made it much more challenging for e-tailers to attract and retain customers within the first few seconds of their visit – because if your customers are entering your site not on the home page, but on a specific product page, then that product page needs to be dynamic and personalized enough to “recognize” the customer and appeal directly to her in record time. Otherwise, forget it – she’s moving on. 

Of course, search doesn’t stop at your site – once a shopper lands there, if you capture her interest and convince her to stick around, she’s likely to continue a “search first” mentality and rely on your search box rather than on the navigation menus. So making sure that search capabilities are strong and that products and content are enhanced with specific facets designed to make them more “discoverable” can make an incredible impact on your bottom line. Now more than ever merchants have to give shoppers lots of easy ways to quickly move through their stores and find the best products for them.    E-tailers are responding to this challenge in a variety of ways, with some like Figleaves.com using automated recommendations throughout their site, and others relying on personalized landing pages that appear as a sort of introduction “welcoming” shoppers from search engines before they make it to the full site. However they are responding to this challenge, it’s clear that they must. Because reliance on the search engine is going to continue to grow, and consumers will expect retailers keep up with them.

As in the States, there is much discussion here in Europe (note: I run ATG’s European operations) about how the slowing global economy will impact e-commerce. Whether you believe current economic conditions are good or bad for e-commerce (or will have no effect), you no doubt always want to maximize your sales on the Web. In working with a roster of great customers, we have gained a lot of insight into what works and what doesn’t. In this post, we present five basic steps that all e-tailers should be taking to get the most out of their e-commerce Web sites.

1. Deploy product-comparison tools. If shoppers are being drawn to the web because they are looking for bargains, comparison tools can be especially useful – particularly in the case of products with many different specifications such as consumer electronics. At a time when people are watching their wallets, comparison tools can be vital in helping shoppers consider how much to spend and, ultimately, in justifying a purchase.

2. Create customer ratings and reviews facilities. Although it can take some time to get a reviews system furnished with a large amount of user generated content, it is time extremely well spent. Any content created by your customers can help win over other shoppers.

3. Personalise. An old principle, but a vital one. As soon as a customer comes to a site, they want to see highly relevant information. E-tailers need to embrace technology that will help them build up sophisticated consumer profiles so that they can match web content and promotional offers to specific customer interests and previous spend threshold. Interconnectivity is the key to any multi-channel strategy and by sharing information captured online with other commerce channels, it is possible to build up an in-depth profile of customers which can be effective right across the business.

4. Co-ordinate on- and off-line marketing initiatives. Retailers should coordinate marketing strategy with merchandising. By integrating e-mail campaigns, for example, with website content, companies will be able to attract new and repeat business. Customers need to be able to relate to a brand and solutions across the full purchase lifecycle.
 
5. Searchandise. When looking for a good deal, consumers will make the most of a website’s search function. Searchandising can deliver search results based on both a customer’s personal profile and the merchandiser’s strategy. Changes to the product catalogue can be automatically updated in the search function so shoppers are not offered items that are, frustratingly, out of stock. Searchandising can also suggests additional purchases that complement what a customer has searched for, presenting items the customer did not even realise they wanted.

Today’s post is from Frank Lord, head of ATG’s Commerce Suite business in EMEA. Frank will also have a longer contributed article on this topic that is due to appear in an upcoming issue of the UK publication, Netimperative Magazine.

The Harvard Business Review recently published a study examining thousands of e-commerce sites worldwide, concluding that those who add compelling content to their websites to directly engage customers successfully grab the sale. The scary part though, is that a majority of e-commerce managers shy away from adding content, believing that “a broad array of information diverts attention from the core offerings.”

When consumers shop online, they want to see information and products that are relevant to their interests. Too many times, retailers focus on price or dramatic offers to lure shoppers in. But research indicates that e-commerce managers who build their sites around what really matters to the person at the other end of the keyboard will be rewarded with higher returns. After all, who doesn’t want to be shown a little TLC? 

Imagine you’re at a party and two different (but equally attractive) men or women approach you hoping to get a date. One asks you a few questions (are you single, your age) and proceeds to give you their life story. The other chats up an engaging conversation during which you both share your thoughts on your jobs, hobbies, recent vacations and your favourite restaurants. Most people would be inclined to choose the second person. People don’t like to be lectured at or involved in a ‘one-size-fits-all’ conversation – they want to feel engaged. The question now becomes, how can e-commerce managers apply this knowledge to their operations?

Really, the trick is to help your site behave like a human being again. New technology tools such as searchandising, click to call and web self-service tools allow you to track and analyse online behaviour and ultimately use this knowledge to connect with your customers. Are they looking for flip flops? Provide them with tips on keeping their tan. If a customer has a question, they want instant gratification. A unique and tailored experience for customers will keep them coming back for more, which in turn will increase up- and cross-sell opportunities for the business and prevent customers from abandoning online purchases at the last minute.

As the economy is slowing and food and fuel bills continue to rise, shoppers are watching their dollars all the more closely. This gives e-tailers a real opportunity to maximise sales. As increasingly savvy customers turn to the web for deals, e-commerce managers should be considering how they can keep them engaged using product comparison tools, reviews and co-ordinated online marketing. These tactics are miles away from the one-sided ‘chat up’ of the shop window websites of the past, but also help to create an interactive conversation with the customer which is far more likely to lead to a long-term relationship – or at least a date. The principals of retail are not much different than dating whether it is online or in person – great looking stores with personalised service keep customers coming back, and happy customers who feel assured that the retailer will remember them every time they return are more likely to pay for their quality experience.

Engaging customers in a two-way conversation is not as difficult as you may think – especially if you know what makes them tick. Retailers that get to know the other person first and use that information in way that engages them, will be walking out of the party with a new date. Skipping the essential courting period could cost e-commerce managers more than a second date. As in the natural world it is only the fittest e-commerce sites that will survive, and to do so they need to engage with the customer in as natural a way as possible.

[tags] e-commerce, personalization, e-tailing [/tags]                 

Last month, ATG, Bazaarvoice, Forrester Research, and Multichannel Merchant hosted a webinar on personalization using user-generated content (UGC).

After seeing the impressive attendance numbers on that, it was clear this is a topic a lot of people are interested in, so Bazaarvoice invited me to participate in a follow-up interview on their blog. You can read that content here.

Please take a look, and let us know if the comments if you agree that most online retailers deserve a “C” grade for their personalization strategies to date. Are there e-tailers out there who are doing an exceptional job with personalization and UGC? What are some of your favorite examples?

[tags] ATG, Cliff Conneighton, personalization, e-commerce, Bazaarvoice, user generated content, UGC, Forrester Research, Multichannel Merchant, online retail, etail [/tags]

Today, we announced ATG’s acquisition of CleverSet, a leader in automated personalization and recommendations technology. With this acquisition, ATG can now offer online sellers the “best of both worlds” in personalization, delivering an optimized e-commerce investment for our customers and an optimized buying experience for their customers.

The announcement and the CleverSet site have plenty of detail about why we think CleverSet has the best technology of its kind on the market. But for years we have touted ATG’s rules-based approach as the optimal way to personalize the online shopping experience, so you might (quite logically) ask if this acquisition of an automated personalization vendor signifies a shift in ATG’s philosophy. The short answer is “not at all!” But I suspect you might like a little more detail, so here’s the story…

The two approaches to personalization are actually highly complementary. The rules-based personalization on the ATG platform can be ubiquitous across the site, and its flexibility allows companies to apply personalization strategies in many different ways. ATG’s personalization is most effectively used in situations where the merchant has a defined and well-understood market segmentation, and understands what the likely best cross-sell offer would be for particular purchase histories and behaviors. ATG allows the merchant to take total responsibility for and total control over creating, managing, and adjusting those business rules.

CleverSet personalization is different from ATG’s in that it is automatic. It “learns” based on the statistical relationships of data. Today, CleverSet focuses on automating product recommendations, and is extraordinarily useful to merchants who don’t necessarily have strong knowledge about what the best cross-sell offer might be for a particular customer. CleverSet is also valuable to merchants who simply don’t have the time, resources, or inclination to build and manage their own rules.

We expect that our customers will continue to use ATG personalization when they want to have close control of their personalization rules and integrate personalized search (show this group of sweaters to fashionistas and another group to others). They will likely use CleverSet more broadly to fully automate the personalization of offers and content when rules aren’t defined explicitly. And these are not mutually exclusive – we actually expect companies to use both implementations together. For example, a merchant could write a rule to do targeted cross sells to a particular segment and also use the CleverSet recommendations on the same page to help drive some other recommendations.

Similar to our eStara brand of products, CleverSet is platform-agnostic and will be offered on demand, delivered in a Software as a Service model. This makes CleverSet an easy add-on to any e-commerce Web site, whether or not it is built on the ATG platform.

We are absolutely thrilled about this acquisition – not only because we are getting great technology, but also great people who fit well with our organizational culture. I look forward to sharing more details when the deal closes.