Solution Providers Transform Retail, E-CommerceBy Lawrence Walsh | Posted 2009-09-01 Email Print
Social networking, 3D presentation applications, customer relationship management and commerce middleware are providing solution providers with the tools to transform the way retailers present their ware to consumers, and provide consumers with more shopping tools and options. Solution providers adept at implementing such interactive retail systems are finding growing opportunity among recession-battered retailers.
Benjamin Franklin invented the lightning rod, glass armonica, bifocal glasses and—believe it or not—the mail order catalog. In his brochure for scientific and academic books, the Philadelphia entrepreneur stated, "Those persons who live remote, by sending their orders and money to B. Franklin, may depend on the same justices as if present."
Mail order catalogs were popularized by retail giants T. Eaton & Co., Montgomery Ward and Sears & Roebuck. Consumers peruse the pages for goods, place an order and wait until it arrives in the mail. The same basic process devised by Franklin survives to this day in online commerce in that consumers must order based on pictures and descriptions and wait until delivery to see what they actually bought.
The notion of ordering and waiting to see if a pair of jeans fits and looks good on your body is an archaic concept to Louise Guay, the president and founder of My Virtual Model, a software developer and solution provider to fashion retailers.
"Experts are convinced that people don’t want to see themselves. I don’t believe it," says Guay, CEO of My Virtual Model, a fashion-focused software developer and solution provider. "People want a very real experience with new online tools and virtual worlds. They expect a user-centric experience."
My Virtual Model allows users to build lifelike digital representations or avatars that can be used for modeling clothing from leading fashion houses. Shoppers can use the height-weight proportional avatar to try on new clothes, colors and styles and see them in the way they’d appear on their bodies. Social networking functions allow shoppers to share their looks with friends to get their opinion before buying.
"People buy more because they feel confident and they can get the feedback from other users," Guay says. "It can inspire them to wear new styles and colors." And for subscribing retailers, the My Virtual Model platform provides a 30 percent to 40 percent higher sales conversion rate than conventional e-commerce methods.
My Virtual Model is just one example of a new wave of Web-based technologies sweeping across the e-commerce landscape. Like many applications of its kind, My Virtual Model combines the traditional customer relationship management functions with 3D and media rich presentations and social networking features to create a rich, interactive user experience that results in higher sales conversions and customer satisfaction levels.
The retail industry—particularly apparel and fashion dealers—took a beating in the recession as consumers shied away from high-end designers and spent conservatively on necessity clothing. With fewer dollars for discretionary spending, consumers have become more frugal in the shopping habits and more deliberative in how they select goods.
A survey conducted by BusinessWeek and myYearbook found that only 17 percent of consumers are posting to social networks for advice and opinions about their purchase considerations. However, of consumers engaging with social networks, 64 percent ask about items they’d buy in a store and not online, 81 percent seek advice from friends and followers, and 74 percent are influenced by their social networks.
The convergence of social networking influence and new techniques for engaging with consumers online is what will propel the next generation of online shopping and help retailers regain their footing among recession-shocked consumers. Interactive 3D presentations and integrated social networking will transform the way online shopping is conducted, says Sandy Carter, vice president of channels for IBM Software Group.
"IBM is going to place greater focus on this industry focus. We want to enable more partners to showcase their domain expertise in these technologies," Carter says. "But it goes beyond the technology. It’s about showcasing business enablement for commerce. Our goal is to help partners understand the sales and marketing opportunity and use this technology to grow their businesses."
CrossView, an ISV specializing in cross-channel enablement, is on the forefront of developing new applications and implementation strategies specifically for improving e-commerce processes and user experiences. Regardless of whether a customer is talking to a call center representative, surfing a Website or traipsing through a store, his selection will go into a single shopping cart for future reference.
This simple concept is exceedingly difficult to execute, since most inventory and purchasing systems are segregated between channels. CrossView—whose customers include Moosejaw, Sam Ash and Scholastic—breaks down the barriers between channels to ensure customers get the products they want, when they want and through which medium they ultimately choose to purchase. For the retailer, they reap greater sales conversions, better inventory control and business analytics, and higher customer retention.
"We’re leveraging all of the components of the underlying infrastructure and extending them to support the other retail touch points," says Leila Ashley, the marketing manager at CrossView, explaining how the ISV developed the system based on IBM Websphere commerce. "It’s about creating a single customer," she adds. "It’s creating symmetry across all channels."
Breaking down the barriers between retail channels is taking on increasing importance given the escalating use of online and mobile tools in making purchasing decisions. This is more elemental than social networks in the Facebook and Twitter context, says Steve Semelsberger, executive vice president and general manager at Pluck. Consumers from teens to retirees are roaming shopping malls with iPhones at the ready to check the latest peer reviews for whatever they spy on the shelf.
Where few people today are engaging directly with their circle of friends on purchasing decisions, they are listening to the wisdom of crowds on where they dispense their money. In the movie industry, they call it the Twitter effect: how instant reviews influence box office receipts. Sasha Baron Cohen’s latest film "Bruno" topped the box office when it opened in July, but got mixed reviews. A closer examination of ticket sales showed the film made all its money on the Friday night opening and, following theatergoers panning, dropped precipitously in the Saturday and Sunday takes.
Pluck provides retailers, manufacturers and high-profile brands such as the National Football League with the social networking tools and content support to build sustainable online communities that promote brand awareness and influence user purchasing trends. The trick, Semelsberger says, is focusing on the user experience and how that reflects on the corporate reputation and value.
"Everyone is experimenting with Twitter and Facebook, but it’s important for when people come back to the site that the soul of the corporation shines through and that they [the users] can engage with the company," Semelsberger says.
Semelsberger says companies that engage with the social experience and give users an easily accessible platform for interacting with the company and peers have a higher level of customer affinity and higher sales conversion rate. Companies that embark on the socialization process can measure their success along four metrics: more unique visitors, engagement with the Website (time on site), conversion (sales activity, account registration) and lower operational costs, he says.
Carter says IBM is providing development support for partners using Websphere as a platform for building next-generation e-commerce retail systems. While the technology is important, she says a deep understanding of and vertical alignment with the retail industry is equally important.
It’s a sentiment echoed by CrossView’s Ashley, who recounted how the ISV transformed itself from a general reseller and integrator of software products and custom applications to a specialty developer of commerce solutions for the retail industry. The in-depth knowledge and skills developed by CrossView for the retail industry enabled it to optimize its solutions for broad adaptability and quick deployments.
"It’s not just about the technology. It’s understanding the need for the solution," says Ashley. "You just can’t deploy technology and think the customer is going to automatically get something out of it."