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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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AUGUST 31, 2004
Taking E-Commerce to the Next Level Coming soon: Improved recommendations and personalized pitches that actually work. But how much of this will shoppers stand for? This summer, Chester Yeum was watching Tom Cruise's sci-fi thriller Minority Report, set in the year 2054, when he realized he was helping make an element of it a reality today. The epiphany came as Cruise strode through a shopping concourse and impromptu, personalized advertising pitches buffeted him from all sides -- just the kind of location-based marketing Yeum is trying to bring to market. Yeum's first step to a 2054-like world is SpotMeeting.com, a location-based online dating service, which launched its beta version in Toronto on Aug. 25. Romance seekers are linked to others near them through software that identifies their location. Today the site maps each members Internet address, but an upcoming version will use global positioning technology to locate members on the go. Eventually, Yuem hopes to sign up retailers to send his customers pitches via their cell phones or handheld computers that will entice them into a store they're approaching, perhaps using a 10%-off coupon. Or maybe send them an e-mail reminding them that an outfit they abandoned in an online shopping cart is available in the store to try on. PROMISE FULFILLED. "I don't believe the mainstream market is ready for that right now," says Yeum, who thinks people first have to get comfortable disclosing their location and personal information -- something they might be willing to do now for a chance at romance. Once his site establishes itself in dating, he says, "we will stream in supplemental applications that will plug right into e-commerce." It's back to the future for e-commerce, now that some of the technologies envisioned years ago are finally ready for prime time. With so many e-tailers profitable, they're finally ready to move ahead with adding new technologies that can take online shopping to the next level. For shoppers, the next level means more interactivity, better visuals, and improved search results with more product information. It also means being watched more closely by sites and receiving personalized pitches based on past browsing behavior -- which can be a little creepy. For retailers, this next phase presents an opportunity to generate more sales volume, but it also requires treading carefully so as not to anger customers by invading their privacy. CLOSER TRACKING. "I find I'm having a lot of conversations these days about the possibilities of online retailing that I first had back in 2000," says retail analyst Patti Freeman Evans of Jupiter Research. Web applications that were sidelined are back, she says, "And now they're better and cheaper to implement." She warns e-tailers not to be overly intrusive, however. "Customers don't want to feel they're being watched too closely." Web designers' widespread adoption of "meta data" and XML (extensible markup language), both standards for tagging data on Web pages, are making the transition easier. With such tagging in place, developers can create applications that manipulate information in new ways. Not only has this technology allowed for higher levels of interactivity but it has also triggered great advances in the ability to track customer behavior on e-commerce sites. That's rapidly leading to more personalization and smarter merchandising. Vastly improved search and site navigation probably represent the most important sales drivers for cutting-edge e-commerce sites today. One such company, Atomz, which hosts the Web applications it designs, has software that trawls a retailer's site gathering product information and creating advanced search functions. At Pacific Sunwear's site, customers can drill down from seeing all shirts, to just, say, girls' t-shirts in red. The retailer has some control over results, too, so higher-price items can be displayed first, says Atomz Chief Executive Officer Steve Kusmer. PREDICTING BEHAVIOR. Atomz also can drive sales by allowing businesses to highlight special promotions tied to searches on their sites, like handheld maker PalmOne (PLMO ) does with a "noteworthy" box that appears along with search results. On PalmOne's site, type "Zire" into its search engine and up pops a box recommending the Zire 72, which comes with photo, video, and MP3 capabilities. The addition of a promotion box above the search results has increased the number of searchers converted to buyers by up to 60%, says Kusmer. Cutting-edge Web sites aren't just serving better information to customers, they're also tracking buyers' behavior much more closely. Web analytics companies Coremetrics and Omniture are thriving on new demand for their products, which analyze customer behavior. These are often sold as a hosted service for fees ranging from $30,000 to $100,000 a year, depending on the volume of traffic and the extent of the site analyzed, says Freeman Evans. Web analytics allows retailers to predict what customers might want to buy next by looking at their past purchasing history, as well as data generated from other shoppers. It also helps companies make important improvements in how easy their sites are to navigate and use. Sportsline.com announced in a May press release that it used Omniture's SiteCatalyst to identify when customers dropped out of signing up for its fantasy football league, allowing Sportsline to improve its process and increase the number of paying customers.
BW MALL
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