Seven toys for online retailers in '06

Just in time for the holidays, seven technologies you need to have on your list, courtesy of Forrester Research.

Attention online retailers. Just in time for the holidays, Forrester Research Inc. has come out with seven technologies

that will transform online retail. If the past decade was all about the greatest Web site, success in 2006 will depend on technology that promotes the cardinal rules of retailing: finding, serving and keeping customers. Forrester senior analyst Sucharita Mulpuru breaks her list of goodies into two categories -- tools to acquire more online shoppers and applications to retain them.

In the category of tools to acquire more online shoppers, the must-haves are:

Really Simple Syndication (RSS): Pull marketing at its best, Forrester said. The content feed for consumers who request it has the benefit of e-mail without the downside -- such as spam. To keep in mind: Only 2% of North Americans (so far) say they use RSS feeds.

Short Message Service: SMS, available on many mobile phones, is finally catching on in the U.S. Forrester found that 24% of people who owned a cell phone and shopped online said they'd be willing to get ads on their phones, if their phone fees were reduced.

"Smart" paid searches: This is the next generation of search technology. It allows advertisers to purchase more targeted ads with layered demographic information that hones in on spending customers.

Online data sharing co-ops: This is the online version of the offline sharing of consumer information to grow mailing lists. Envision eToys showcasing ads on big sites like CNN only to online buyers with kids.

For more information

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Voice over Internet Protocol (VoIP): If it's good enough for Meg Whitman … When eBay spent billions to acquire VoIP leader Skype, the online retailer saw the potential for faster transactions by connecting buyers and sellers free of charge.

Blogs: Blogs can help retailers engage avid shoppers in two ways. Retailers can run advertisements on external blogs or run one of their own, as Bluefly does with Flypaper. The challenge, of course, is finding the right external blog. Forrester likes two: Endgadget.com, full of technology reviews, and Gizmodo.com.

Podcasting: Retailers should ready themselves to take advantage with "podcastable content," such as short ads, product demos and product placement on shows.

Forrester suggests that retailers start with the "lowest hanging fruit," or established technologies first, namely blogs, podcasting, Ajax-powered features or Firefox. With minimum investment, companies can get a quick read on whether the tools bring customers to the table, Mulpuru said.

Retailers should be thinking now about the organizational changes needed to keep up with the new delivery modes, Mulpuru said. Companies must hire creative staff with technical backgrounds or be prepared to outsource. They should also be investigating effective and user-friendly business intelligence tools to decipher the mountains of customer data that will be accumulated. Lastly, as Sony has discovered, retailers will have to work "more closely than ever" with their lawyers to craft and obey information-gathering policies that respect the rights of customers. "Without trust, adoption of all these emerging technologies will languish and keep the industry in a state of stasis," Mulpuru said.

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