Online Shopping Experience

We've been saying this pretty much forever.  Bizreport just wrote "If your e-commerce site doesn't already feature site search then perhaps a recent survey, conducted by comScore, will convince you to implement it ready for the holiday season."  More on the overall results of the survey are in a Search Engine Land article.

And the number of people using site search is climbing!  The survey found 40% of shoppers use search, whereas only 20% were browser.  This underpins the importance of adapting your customers online experience, no matter how they get to you, or how they find things on your site.  Search, Navigation, Recommendations - they are all important.  User generated content, catalog content, supporting editorial content - all important, all potentially deal clinchers for your shoppers.  And another nugget about how important relevant search results is, after using the site search box 94% click on between one and 10 product listings according to the study.

And fixing site search in time for the holiday shopping is still possible with no heavy lifting from your stressed out, "don't ask me to change the site before January" IT guys.  If you have search, let the crowd help you offer more relevant results.  Again, no tuning, no heavy lifting.  If you don't have site search at all, we offer a hosted site search option as well.  It is easier than you think.

I just caught Kara Swisher’s post, in which she calls on all geeks to replace “real-time” Web with “right-time” Web. Right on, Kara.

Okay, so Venrock’s David Pakman should get some credit too, since Kara heard the term from him first at the Twitter Chirp conference earlier this week.  According to her post, Pakman thinks the ‘right-time’ Web is more valuable in some cases than the real-time Web:

“Real-time data is only interesting when I’m actually looking for that information. There’s no service today that’s giving information when it’s really needed. If your company is doing that…I brought my checkbook.”

Kara was a little less diplomatic about the real-time Web buzz frenzy that’s happening right now:

“One of the key issues being raised of late about making all these status update data streams helpful is that they are super-useless 98 percent of the time, resembling a raging flooded river more than a way to navigate to any place that is actually useful. Someone does have to significantly drop the signal-to-noise ratio on all this blather, cutting through to find the really valuable information we all know has to be there.”

Within the context of personalization, including crowd-sourced product recommendations and social search, “right-time” is far more meaningful than the “real-time” moniker. If I’m on the Web, I don’t want to get flooded with content just because it happens to be available in real-time. I want to get connected to the “right” information, in the instance I set my sights on it. Not seconds later.

The explosion of available content and products online has undeniably fueled this culture of immediacy. This has had profound implications for businesses, who are increasingly struggling to deliver on a new standard in customer expectations that’s all about instant gratification. As the so-called real-time Web matures, the online businesses that will prevail are going to be those that can effectively leverage this real-time culture to their benefit, meeting and exceeding customer expectations as they evolve by focusing on serving the right Web, at the right time.

We’re focused on making this a reality by enabling companies to tap into the collective intelligence of their website visitors. Although most of the real-time Web buzz continues to focus on gathering and making sense of user generated feedback captured in Twitter and Facebook, you can’t possibly observe the Web merely by looking at it or reading it. This is because the majority of what happens on the Web is never written, never rated, never reviewed. It’s told through behavior patterns in the form of online comparison shopping, bookmarking, mouse scrolls and hovers to name a few.

By mining for real-time explicit data and right-time implicit behavior patterns, companies can deliver their Website visitors a customer experience a league above the rest.

Last week I had the opportunity to deliver a keynote at eTail West in Palm Desert where I spoke to retailers about how they can maximize revenues by using the collective intelligence of their Web site visitors to personalize the customer experience in real-time. I chose this session topic because increasingly, brands are struggling to adapt and personalize the online shopping experience to their customers’ evolving needs. Retailers need real-time customer insight and the ability to respond automatically with a more personalized online experience that mimics the experience they get when walking into a local hardware store or clothing boutique. This creates happier, more loyal customers, and ultimately increases profits.

After attending the event for four years, I’ve had the opportunity to see first-hand how the market has shifted over time. The discussions at eTail West in the earlier years were primarily about how to manage, measure, and increase transactions. But most retailers have this figured out by now, so their focus has shifted to maximizing their revenues in new ways.

Naturally as the market has matured, retailers have grown to be more concerned with customer experience and service, so it’s no wonder that the three consistent themes at this year’s event were multi-channel customer experience, personalization, and recommendations. Online retailers are looking for new ways to increase their revenues and to achieve better personalization and customer targeting. They are also looking for new ways to maximize revenues by deploying the recommendations they already have in place in a much broader sense. Now that retailers have reaped the benefits of traditional product recommendations, they understand the capabilities these technologies have to tackle the newer issues, such as navigating social elements of their sites and the ongoing quest to improve search.

Just as the market has matured, so has Baynote. Each year at eTail, we’ve seen interest in our approach grow. Listening to the conversations of the attendees and the other speakers this past week, it was clear to me that Baynote’s time has come as retailers hone in on providing a superior customer experience and ultimately how to create happier, more loyal customers.

Perhaps the best evidence of this was a survey I conducted during my presentation. I asked the crowd: “Raise your hand if you think your best salesperson can outsell your best customer?” The result? Not a single person in the room raised their hands. When I asked another question: if the happiest customers are the most important to increasing their revenues; almost every single person in the room agreed. This demonstrates just how powerful peer-to-peer brand advocacy has become to retailers and the bottom line.

I left Palm Desert thinking about what an exciting time it is to be involved in the e-commerce industry, and how proud I am that Baynote’s customers are setting the standard with more sophisticated personalization approaches that are transforming the customer experience as well as their online businesses.

There is a wealth of content available online, and as we know all too well, it can get overwhelming to try to keep up. The Baynote team regularly reads the following industry blogs and media sites that are tackling the hot issues and trends that touch our business and our customers. Please let us know what you think of our shortlist and if you have recommendations for other sites that we have overlooked.

Collective Intelligence

1)      Tom Austin, Gartner – Tom is a group vice president and Gartner fellow who covers how IT can enhance the performance of individuals, teams and organizations.  His blog includes insightful analysis on the impact that various forms of technology have on productivity. He has been placing a lot of focus on Pattern-Based Strategy, which enables business leaders to actively seek, amplify, examine and exploit new or novel business patterns.

2)      Forrester’s Customer Intelligence Blog – Authored by Forrester analysts Dave Frankland, Julie Katz, and Suresh Vittal, this blog provides details on the latest research and trends affecting marketers that are focused on mining customer data from online behaviors.

3)      MediaPost Behavioral Insider – Steve Smith’s blog takes a fresh look at behavioral marketing, analyzing the latest strategies for marketers to better understand their customers and make strategic decisions that are based on proven approaches.

4)      Destination CRM – This online daily edition of CRM Magazine reports on the latest information on customer relationship management.

Real-Time Web

5)      Steve Gillmor, TechCrunchIT —  Recognized as the leading journalist on the real-time Web, Gillmor has reported on every key player in real-time, either through written blog posts, or in online video episodes with The Gillmor Gang. The Gillmor Gang is a technical show that interviews IT industry executives at major companies that have deep knowledge in the technology that they focus on.

6)      Pete Cashmore, Mashable – The founder and CEO of Mashable, one of the most popular blogs worldwide, Cashmore writes a weekly column for CNN.com as well as regular posts on Mashable. He has been following real-time Web closely lately in his CNN column.

7)      John Borthwick – Currently the CEO of Betaworks, Borthwick’s blog posts study the development of the real-time Web. As an entrepreneur, Borthwick is involved in various companies that touch on the real time Web, and in his own words, is interested in understanding “how media evolves as it collides with real time conversations.”

e-Commerce

8)      Jeffery Roster, Gartner – Jeffery is a research vice president at Gartner as part of the Industry Market Strategies Worldwide unit covering the retail and wholesale industries. His blog posts provide insight into research he is working on, as well as his reflections on industry events including NRF.

9)      Forrester eBusiness & Channel Strategy Professionals Blog – Forrester analyst, Sucharita Mulpuru contributes to this blog every once in a while, and we always find her posts to be very relevant to Baynote. Sucharita publishes the annual Holiday Retail Forecast, and is a recognized authority on technology developments that affect the online commerce industry and vendors that facilitate online marketing and merchandising.

10)   Get Elastic – An e-commerce blog maintained by Elastic Path’s Emerging Media Analyst and eCommerce consultant, Linda Bustos.

11)   Shop.org – An open forum for shop.org members to post their knowledge and experiences with e-commerce.

Search

12)   Gilbane Search Blog – Linda Moulton of analyst and consulting firm, Gilbane Group, blogs regularly about trends and technologies in enterprise search.

13)   Search Engine Watch Blog – This blog by Nathania Johnson provides tips and information about searching the Web, analysis of the search engine industry and help to site owners trying to improve their ability to be found in search engines.

Technology & Innovation

14)   Sramana Mitra on Strategy – An entrepreneur and a strategy consultant in Silicon Valley for over 15 years, Sramana  also writes a weekly column for Forbes and is currently authoring Entrepreneur Journeys, a series of books focused on demystifying entrepreneurship. Her blog posts profile various entrepreneurs, and provides a comprehensive look at the innovation that is happening in Silicon Valley today.

15)   Read/Write Web – One of the world’s top 20 blogs, Richard MacManus, Marshall Kirkpatrick, and their team do an excellent job of analyzing all products that relate to the Internet, and the top trends that impact changes in Internet-related technology. RRW is a great place to remain updated on the latest and greatest Internet innovations.

Customer Service

16)   Ragsdale’s Eye on Service – John Ragsdale is the Vice President of Technology Research for the Technology Services Industry Association (TSIA). He shares the latest in technology innovation, industry events, and his expert commentary on the latest issues effecting customer service executives on his blog.

There’s been a lot written on this blog and in the media about how e-tailers can increase sales by tapping into the collective wisdom of their site visitors to optimize the customer experience. While the role that manufacturers play in the online retail channel is pivotal, their vantage point has has been missing from the majority of industry articles and blogs focused on this topic.  This is mainly because manufacturers have been relatively uninvolved in ecommerce strategies for the most part – until recently. Proctor & Gamble’s entry into direct sales through their eStore earlier this year reinforced our belief that the business concept of collective intelligence does not just apply to e-commerce companies.

P&G’s eStore was prompted by a mediocre year in online sales for the consumer goods manufacturer. According to a recent article by Andy McMains of AdWeek, less than one percent, or $500 million, of P&G’s $79 billion in global revenue last year stemmed from online sales via sites such as walmart.com and amazon.com. Through the eStore, P&G hopes to learn from consumers how to better market their products and improve online sales across all e-commerce channels. One of the main goals of this initiative is for P&G to learn about consumer buying patterns and share this customer intelligence with its retailer partners to boost sales.

eCommerce is unique in that Websites allow retailers to quickly identify consumer shopping patterns, and automatically adapt their merchandising programs based on this insight. This is simply not possible in brick-and-mortar stores. With Baynote’s technology, for example, retailers such as Urbanoutfitters.com and Bluefly.com are able to more quickly recognize even the most unexpected trends, such as consumers purchasing two seemingly unrelated products, and then personalize product recommendations in real-time. This improves the next shopper’s experience, builds loyalty and boosts sales.

Since most products are currently sold via retailers rather than directly by manufacturers, manufacturers are often left in the dark on the valuable data that their retail partners can obtain about consumer behavior. While brands have been able to utilize the Internet well to engage with consumers via email marketing, social networks, online product reviews, and a slew of other activities that require their explicit feedback, they have not had a direct link into the less obvious but often more telling data that ecommerce affords. This includes leading, often termed “weak” signals about consumer intent that can only be gleaned from the online shopping experience. Think clicks and hovers, not hard transactions.

This new online environment should enable P&G to monitor and respond to shifting consumer trends in real-time, and we are looking forward to seeing how their customer engagement initiative will change the overall online retail landscape. We predict that the insight gained from eStore will improve both indirect and direct sales, as P&G will be able to better collaborate with their distributers on why certain products are selling well, and how to improve upon the merchandising and online sales strategies. If managed well, the P&G eStore should also allow the manufacturer to bring innovative new products to market significantly faster based on real-time visibility into the online browsing behaviors of their customers.

The central focus of Gartner’s Symposium/ITxpo this week in Orlando is all about implementing what they’ve recently dubbed as a “pattern-based strategy”.

According to Gartner, a pattern-based strategy “provides a framework to proactively seek, model and adapt to leading indicators, often-termed ‘weak’ signals that form patterns in the marketplace.”  For the past several years Baynote has been committed to helping companies identify these patterns with technology that lets them tap into the collective intelligence of customers visiting their websites. This is something that transactional based systems such as business intelligence (BI) and complex event processing (CEP) simply haven’t been able to deliver. Here’s why:

1) For years BI, CEP (more recently) and other related technologies have helped organizations become much more efficient by automating their interactions with customers. However, in the process of creating huge economies of scale, they forced companies to lose the “mom and pop” touch that consumers expect when they walk into a local hardware store or restaurant. In failing to create digital mom and pop experiences, online retailers and publishers have placed unnecessary emphasis on promoting popular products and content, thereby losing out on profits to be gained from merchandising their long tail products.

2) In addition, these so-called “predictive” applications have historically prioritized the wrong set of indicators, often identifying consumer trends weeks, if not months, after the fact. For example, e-commerce transactions lag other more relevant indicators, such as online comparison shopping, by months. Only by tapping into the power of the collective is it possible to see early signals, spot trends and develop strategies around them before your competitors catch on. This holds particularly true for long tail products. Our customer US-Appliance tapped into the implicit behaviors of its website visitors to merchandise colored washers/dryers months before Home Depot and Best Buy began promoting similar products in their stores.

In Gartner’s recent report, entitled “Introducing Pattern-Based Strategy”, they view “the collective” as being critical to developing a pattern-based strategy. We couldn’t agree more with their position:

The collective comprises individuals, groups, communities, mobs, markets and firms that shape the direction of society and business. The collective is not new but technology has made the collective more powerful — and enabled change to happen more rapidly. The explosion of social software has enabled groups and individuals to rapidly form and rally to a cause — often resulting in significant societal changes.

The result for business is a cacophony of rapidly evolving demands, expectations, inputs and transactions, as well as an opportunity to not only react, but to seek signals of change from the collective. Market trends, some subtle, others strong, are masked by noise, and many enterprises are failing to proactively detect the patterns they rely on to direct future strategy and support investment decisions. In addition to failing to detect these patterns, enterprises are not utilizing new resources to proactively seek signals of change nor do they understand their power to influence individuals and communities.

Val Sribar, group vice president of Research at Gartner, sites Amazon’s and Netflix’s use of recommendation engines as good examples of organizations leveraging collective intelligence to support their pattern-based strategies. Sribar agrees with Baynote that recommendation engines identify new patterns in behavior as customers browse and purchase. While Amazon and Netflix are highly popularized cases, we’ve helped hundreds of other well known brands tap into their collective customer networks to significantly increase revenue through cross-selling and upselling, and higher customer loyalty.

We’re excited to see Gartner take a leadership position on this important issue and look forward to working with them and our customers to bring best practices related to collective intelligence to the forefront of modern business strategy.

Before going to eTail East which was this week in DC, we at Baynote were a little concerned that attendance would be down given the economy and the high cost of travel.  Attendance was only slightly down from last year and the enthusiasm was high for both pure-play eTailers as well as with the online people for brick and mortar retailers.

During the Advanced Search Forum, when asked if there were any activities they were doing in 2008 that they intended to scale back in 2009, there was silence.  It seemed that everyone there was still doing anything they could to improve the customer experience and get the right message to the right person. I canvased several people privately and asked them if their high level goals were changing – few described any sort of retrenching, some said efficiency and automation were becoming more important.  The idea of putting the collective intelligence of site visitors to work, as Jack Jia has described it “let the mob run the store”, seemed to make sense to everyone.  It appealed to those trying to do more with less as well as those trying to bring the right social technologies to play on their sites.

Interestingly blogs themselves are still up for grabs regarding how and when and why they should be used.  Barbara Mousigian of CDW commented in the session on Customer Experience, that people were frequently distracted by blogs as the latest shiny object to add to their site.

I asked our CEO Jack what his biggest take-away was from eTail.  He said that businesses still haven’t figured how to create a connection with customers the way business could when mom & pop stores dominated.  They put so-called experts in charge…marketers and merchandizers in the world of eCommerce.  But this isn’t the same and the gap is still great.  Shopping on the web is still, in its essence, a lonely experience.  But what was cool at eTail, was people acknowledged the gap and were actively looking to fill it….not haphazardly with the latest shiny object but with the best practices and technologies already proving themselves in the marketplace.

I’ve just returned from the Shop.org Annual Summit in

Las Vegas. Despite it being in Vegas and having mild distractions lurking around every corner, I managed to see a good deal of the conference content and not miss any of the sessions I was supposed to lead or participate in.

Many continue to ask whether eCommerce growth has peaked. With countless consecutive quarters of double-digit growth, one has to ask these kinds of questions. Well, the data suggests it has not peaked. According to Forrester analyst Sucharita Mulpuru, ecommerce will continue to grow at a rate of 25% annually for the next many years. The reason? Online retailers not tackling the basics.

As the holiday season approaches, and since it’s football season (thankfully), it’s only appropriate that we talk a bit about blocking and tackling fundamentals. Forrester and other pay mention to the following:

 

1) Completing the Transaction

Amazingly, some leading eCommerce websites are seeing transaction failures as high as 12-14%. For comparison purposes, the airline industry which is hardly the gold-standard in service sees has delayed/cancelled flight rates of about 6%. There are $ millions left on the virtual table as consumers are driven to alternative channels to make their purchase.

2) User Experience

Snazzy front ends that are engaging and interesting may draw some attention, but don’t forget the basics of making it easy to browse, search, add to cart, and purchase. ‘Pretty’ is good, but usable is better.

… and finally…

3) Product Recommendations

The only technology that Forrester recommended were recommendation engines.  Recommendation engines help retailers dynamically up-sell / cross-sell / merchandize their products.   With thousands of products and millions of visitors to an online retailer’s website and automated solution to this is a necessity, but measure the impact so you can truly understand the hard-dollar impact it’s making.

So make sure to do your homework and invest in the basics of selling, merchandizing, and completing transactions.Also, I wanted to give some credit to Jason Billingsly over at Elastic Path. He presented an eye-opening and incredibly engaging session on leveraging social media for eCommerce. If you have a chance, check out his session at Online Market World in

San Francisco in early October, you won’t be disappointed.