IT preps for increase in online shopping demand, video, customization

Online retailers can court customers and increase their Web-based profits by customizing shopping experiences, enhancing videos and embracing social connectivity.

IT departments with retail organizations are increasingly expected to support the kind of custom online experience that encourages visitors to open their Web browsers -- and eventually their wallets. But a clear strategy could be holding many of them back, experts say.

Experts at Web Experience Forum 08, held recently in Boston, had several pieces of advice for CIOs grappling with how to leverage IT so customers can have the best possible online experience.

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Among them: Stop making your customers work to find information on the products they're seeking. Embrace social connectivity via the Web and the impact it will have on users' shopping experiences. And don't be afraid to take some risks with your online platforms, really catering to individuals who are most likely to be your paying customers.

In a survey by Forrester Research Inc., a Cambridge, Mass.-based research firm, 287 North American firms with $500 million-plus in revenues were asked what role customer experience will play in their competitiveness in the next three years. Sixty-four percent responded it would play a critical role, with another 27% answering almost as enthusiastically.

Bruce Temkin, an analyst at Forrester, said he has found that customers report the highest level of satisfaction -- 82% -- when making purchases in person, while 61% report satisfaction when making purchases through the Web.

"It's just a reasonable failure, not a complete failure," Temkin said. "But I know we could do a lot better than that."

In a Forrester index ranking the websites of 112 firms across nine industries, wholesaler Costco Wholesale Corp. ranked No. 1 in online customer experience.

"Why Costco? What Costco does really effectively is they have a brand," Temkin said. "People know what to expect when going to Costco, and Costco consistently delivers on those expectations."

When companies were asked about obstacles in improving customer experience, 56% cited a lack of clear strategy, while 55% pointed to a lack of cooperation across organizations. Temkin stressed the importance of developing "experience-based differentiation" and "interacting with target customers in a manner that consistently builds loyalty."

Temkin advised "obsessing" about customer needs, rather than product features, and using the Web to deliver on those needs. For instance, parents can now manage online some credit cards targeted at teenagers, settling spending limits and overseeing transactions.

"The online features meld into existing products," Temkin said, urging companies to make them "core features of your offering" via the Web.

The power of video

To demonstrate the power of some of Temkin's recommendations, David Hogue, director of information design and usability at San Francisco-based online-retail consultant Fluid Inc., discussed ways of bringing real-time customization to the user experience.

"The future is really hard to predict, but we know we're going to be able to craft a better user experience," he said.

Video is one area in which e-tailing can continue to expand in the near term, Hogue said.

"Video is going to be the next .jpg," Hogue said, as video players become more seamless, allowing shoppers to more easily visualize a product in context and watch how it moves or operates. "It tells a narrative."

Being able to give people access to content and functionality is how [shopping sites] are going to be moving.
David Hogue
director of information design and usabilityFluid Inc.
For example, in the " shop by outfit " feature at clothier Martin+Osa's website, models walk on and off screen according to the customer's stated preferences for color, texture and shine. "There's no need to cause this video to begin -- it just does," Hogue said.

Hogue breaks such video down into two categories: "fast" video, which provides context, demonstration, information and entertainment; and "slow" video, which provides more access to the user and focuses on the products, objects or people.

He also discussed the retail advantages of "low-fidelity" video, such as those often found on YouTube, where individuals not employed by a company often do their own product demos and reviews. "Think about how much info that conveys in a 60-second video," he said. Good or bad, these provide your company with exposure, and can provide clues on what aspects of your product customers want to learn more about.

"High-fidelity," professional video is more common to professional retail sites, although Hogue warned that companies should consider how such video affects load times, bandwidth and page weight.

"As bandwidth and technology begin to converge for us, we're going to see [videos] on a larger and larger scale," he said.

At Saks Fifth Avenue's website, visitors can "shop the runway," clicking on individual pieces of clothing to learn more and purchase them.

And at SeenOn.com there are "Shopisodes," short clips from popular, fashion-forward televisions shows like The Hills and Lipstick Jungle. Alongside a clip, you see fashion items worn by the individuals; clicking on an item will tell you more about it and allow you to go to a store to purchase it.

Create a custom Web experience

Many forward-looking retail sites let users customize products. At CafePress.com, visitors can not only create a T-shirt or mug, but they can also put it in their marketplaces. At Reebok's custom site, a user can personalize a shoe right down to the color of the material and stitching. In the two years since this feature launched, nobody has created the same shoe, Hogue said.

Such customization can range from discrete (a user selects it, you make it) to limited (users select from a few sizes and colors) to full (users select from many choices). "When they place this order, people know that it's not being pulled from the shelf -- it's being made expressly for them," Hogue said.

In fact, he queried why more stores don't take the "pop-up store" concept -- whereby a storefront opens for a limited time -- and apply it on the Web, creating a URL for a month or two and advertising its contents as limited, exclusive and temporary. "They can generate brand awareness or generate brand mystery -- it depends on what they want to accomplish," he said.

"Focus on the point of customer interaction"

Retail website designers should make every effort to home in on how, exactly, their visitors perceive and interact with their sites, right down to decisions about text size, pop-up windows and framing.

"When we design our own experience, really focus on the point of customer interaction," Hogue said. "If you present information poorly, you shouldn't be surprised if people make poor choices."

Since it's difficult to anticipate every shopper's needs, it's important to provide easy access to not only what a person is specifically seeking, but also what he might want, leading to "fewer scavenger hunts."

At Etsy, a marketplace for handcrafted items, customers can position their mouse over a color, and the store provides a link to every item in the marketplace that includes that shade. You can also "shop local," according to a geolocation filtering service, if you want to purchase items from a particular community.

Look for unobtrusive ways to gather customer information

To help retail sites provide customers with items tailored to them, Hogue touted the concept of "passive aggregation," by which companies collect information on their customers without expressly asking for it.

Neiman Marcus, for instance, keeps track of what customers look at, and sends them emails detailing what's hot, focusing on items similar to those customers have looked at or bought in the past.

Successful sites are already pulling in services from other sites in Web 3.0-style mashups, such as StyleFeeder, a "personal shopping engine" that links out to a range of other retail sites.

A single point of contact is limiting, Hogue said.

"Being able to give people access to content and functionality is how [shopping sites] are going to be moving," he said. "People are going to be creating their own user experiences … when we give them the access to do so."

More and more, online shoppers are looking to make lists of the items they like and to allow others to browse their lists, trends a CIO should keep in mind when strategizing about online platforms.

"One of the core things about Generation Y is that they're using [the Internet] as a form of social credibility, getting a social status and establishing an identity," Hogue said. "These are your heroes, your evangelists and your brand ambassadors. They can help create and foster an online brand and community."

Let us know what you think about the story; email: Rachel Lebeaux, Associate Editor

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