Even CIOs at billion-dollar retailers have to put their jeans on one upgrade at a time. But Guess CIO Michael Relich found himself in an especially difficult position when Web analytics told him that 60 percent of his e-commerce site’s search results were delivering “not found” responses to prospects.
Guess’ site search was a legacy search and it didn’t have any natural language processing, so typos and searches for reasonable terms—such as “jeans”—often delivered no results because the prospect hadn’t typed in the exact brand name.
“Before, our search was just a standard SQL Server on our database,” Relich said. “Unless the customer put in the exact terms in the exactly right way, a whole lot of ‘not founds’ came back. Search is a good thing if you’re doing it right.”
The Los Angeles-based company quickly decided to replace its system with an enterprise search system and started evaluating vendors.
But Relich’s team then had a classic IT problem: What to do with the poorly performing search function for the six months or so it would take to have a new system selected, installed, tested and launched?
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If the old system continued, customers could get frustrated with bad results and abandon the site, think poorly of Guess and shop elsewhere. If Relich removed the search function, customer service personnel and other Guess employees and partners would be deprived of a powerful tool, presuming they knew exactly what they were looking for.
Relich’s decision: Keep the search active on the site, but hide it until it’s working properly.
Nirbhay Gupta, the Guess senior E-commerce manager, said his team “hid” the search engine by placing it on the screen “lower bottom, where it was just one of the links.”
How important was the search for customers? Gupta reported that shortly after the search engine was replaced and relaunched in its former prominent placement, purchase conversions increased eightfold.
The system Guess switched to came from Mercado Software, which provided an outsourced hosted option. Bryan Surles, Mercado’s director of sales engineering, in Pleasanton, Calif., said hiding the search capability for an e-commerce site is a risky strategy, but having a malfunctioning search isn’t much better.
“Hiding your search box? That’s ridiculous. You’re losing money,” Surles said. “You’re forcing people to use navigation as a strategy. Search is paramount. Customers expect to be able to use search on the site. Otherwise, customers will leave.”
E-commerce analyst Tamara Mendelsohn, with Forrester Research, based in Cambridge, Mass., said Guess was in a difficult position where there was likely no ideal move. That said, she, too, agreed that an e-commerce search function is considered so essential today that removing it might be unwise.
“Customers are more likely to forgive a minorly frustrating experience—like typing in ‘jeans’ and not getting any results—than having no [search] at all,” Mendelsohn said. But if the results were as bad as 60 percent “nothing found,” it’s really a no-win situation, she said.
“You’re going to have to choose the lesser of two evils. Customers [who get a lot of “nothing found” replies] are going to get frustrated and so aggravated with the site that they don’t come back,” she said, adding that Guess probably struck the right balance. “It makes some sense. I would have said, ‘Fix it and fix it now,’ but there’s always the question of what to do in the interim.”
Greg Buzek, a retail technology analyst and the president of the IHL Consulting Group, in Franklin, Tenn., said Guess’ predicament is becoming more common. “You can increase customer service or you can do things that frustrate customer experiences,” Buzek said. “What Guess is doing is they’re trying to eliminate the frustrations.”
Buzek said he would have counseled removing the search entirely until it worked properly, but he added that it’s difficult to make that decision. “By making search hard to find, in essence, they lowered the customer service or at least the perception of customer service,” he said.
Next Page: Guess got an unexpected bonus: a 60 percent server load reduction.
The e-commerce search engine space is especially complex today, as Google and Yahoo try to become the default e-commerce engine for many companies.
In Guess’ case, the outsourced Mercado approach also delivered an unexpected bonus: a 60 percent server load reduction, because the database now longer needs to crunch search lookup requests. “We now don’t have to go to the database until we have a purchase,” Relich said.
As it happened, the IT department isn’t seeing much immediate noticeable benefit from that 60 percent load reduction, Relich said, because, “We had enough capacity to begin with. The database was never constrained.”
Forrester’s Mendelsohn dubbed the server load reduction “an extra silver lining to the whole thing, which is not typically factored into the ROI [return on investment] benefits.”
Relich said he was more pleased with the scripts in the Mercado package, which make the search engine easier to update, as the Web analytics function identifies more common typos or synonyms that customers are typing. “Before, I had to give it to a programmer to write code. Now all I need is a new rule and I can have a merchandising coordinator do it,” he said.
Guess’ situation is somewhat different from that of a typical E-Commerce site because it has such a high percentage of multichannel shoppers. CIO Relich said he estimated that “85 percent of my site visitors also shop in the store” and “almost 50 percent of our Web visitors come [into a physical store] once a week or more.”
One factor is that Guess the company is experiencing a radical change in its 25-year history, from being an apparel manufacturer that distributed wholesale to being a company that today is primarily a retailer, which sees 75 percent of its revenue coming from 325 Guess stores in North America (100 in Canada and 225 in the United States). The shift for IT is substantial.
“We had a data warehouse for wholesale, but we’ve never had one for retail,” Relich said, adding that the company is now using a package from MicroStrategy to create a retail data warehouse.
Guess is now looking at its Web site as a true sales tool, but one that might work best by helping store sales instead of performing direct sales. The company recently changed its inventory process to try and become more seamlessly multichannel.
Traditionally, Guess.com was given its share of inventory and was treated as just another store. The problem happened when a particular product was especially popular. The site’s real-time inventory application would remove the item from all pages the instant it detected no remaining inventory allocated to the Web site.
At that moment, the site would stop being a way to investigate all products the company offered. The system removed those items from display even if the warehouse had plenty of that product that was not assigned to any store or for the Web site.
“We don’t want to offer anything that we can’t ship,” Relich said, adding that when someone then assigned some of that merchandise back to the Web site, “It would suddenly reappear back on the Web. It became a big customer satisfaction issue. We had the item, but it was just on the other side of the distribution center.”
Relich’s team worked with Manhattan Associates to modify the software so that anything sitting in the general warehouse inventory would be available for e-commerce sales.
Guess is also now allowing store customers to order any merchandise that the store doesn’t have in stock by using a Web interface from within that store, with all shipping charges waived.
This delivers two benefits to Guess: making the customer happier (“The store orders it for you and, three days later, it’s on your porch,” Relich said) and collecting customer e-mail addresses for future CRM (customer relationship management) options.
Guess has also recently started moving its stores closer to real-time inventory, courtesy of new DSL connections. Before, it was using store stand-alone POS (point of sale) systems to dial in once a day with updates. The only close-to-real-time option would have been Frame Relay. “It was a very expensive proposition” to get real-time inventory and sales data, Relich said. “Is it worth a quarter of a million dollars a month to know that?”
But with DSL becoming available in much of the continent, the situation changed. “As it has become more ubiquitious—and for $74 a month—we now have the bandwidth and the store has access to all kinds of information it never had before,” Relich said.
Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com.
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