Online retailing "tango" is adding some steps

28 Jun Online retailing "tango" is adding some steps

Bailando, Adelante, Atras!* (For a translation, scroll to the end). The online retailing tango is in full swing with retailers and buyers alike modifying their steps as the Internet changes everything.
We’ve heard this for years, and most of us have adopted at least some of these changes (both good and bad) in the ways we disseminate and find information, communicate, interact with each other, or buy and sell goods and services. For retailers and consumers, the Internet has transformed shopping in ways both big and small as each party scrambles for relative advantage in the shopping dance. In this complex “contrapaso,” consumers have gained the upper hand thanks to the greater transparency to pricing, product, and retailer information that the Internet provides.
Contrarians with a narrow perspective might argue that the impact of the Internet isn’t that great given that Internet sales represent only five percent of all retail sales and that they are starting to grow at a slower rate. This slowing in growth is taking place even in categories that formerly experienced torrid growth rates like apparel, travel, books, and pet items, according to Forrester Research reports in a recent New York Times article. Based on this trend, many analysts project that online retail sales will only reach seven percent in 2011, albeit significantly higher in certain categories.
What these pundits are failing to recognize is that the Internet has changed shopping beyond the immediate purchase transaction in ways that retailers need to be cognizant of if they want to align their strategies and get in “ritmo” with their consumer “dance” partners. The transformation is taking place through a range of online activities, including the use of powerful shopping search engines; through research at and commentary in product and service review sites or in retailer-sponsored review sections; through interaction at virtual showrooms on sites like SecondLife; through newer trends like the use of social shopping and through the growth of brand advocate and detractor bloggers supporting or trashing retailers (see “Brand Protection in an Age of Consumer Engagement.”)
Online shopping behavior
Looking at a few of these changes in more depth can give you insights on consumer behavior as it relates to shopping, and possibly generate tips for readers with retail operations ranging from physical locations, to online sites, to catalog marketers or some blend of these with the goal of staying in tune with the net savvy shopping generation.
For branded goods, shopping search engines or comparison pricing sites allow consumers to search for the best deal online. For example, sites like MySimon, PriceGrabber, Google Product Search, Shopping, Shopzilla and the Madison-based Jellyfish, allow consumers to access comparisons in a broad range of product categories. (Note: Jellyfish is a shopping search engine with a twist, as they say “We SHARE at least half of each dollar that we earn when you shop and buy using Jellyfish.com.”)
Specialty search engines or comparison sites allow those with specific vertical interests to pursue them. Among these are Shopstyle and Glimpse, two search engines catering to the fashion crowd.
Consumers also are increasingly looking to contribute to product and retailer reviews as part of their research process. Their research takes them to sites that offer an aggregation of professional reviews like ConsumerSearch or focused category reviews like CNET (technology products) or Edmunds (automobiles); to those that focus on aggregating reviews of other shoppers like Epinions (multiple product categories) or Expedia sponsored Trip Advisor (travel); to sites that blend professional and user reviews like Wize; to local review sites like Yelp and Yahoo! Local; or to customer reviews at retailer sites, a feature popularized by Amazon’s consumer reviews.
This increasing use of consumer reviews at retail sites has implications for e-commerce firms. According to the Marketing Sherpa Ecommerce 2007 Survey, 58 percent of consumers strongly or somewhat prefer sites with reviews. Not only do consumers prefer sites with reviews, they are reading them, too, according to Forrester data reported at Bazaarvoice stating that 71 percent of online shoppers read reviews.
Other social shopping developments worth noting and monitoring include: ShopWiki, where consumer contributed shopping guides are added to search engine results to help consumers in their shopping quest; ThisNext, StyleHive, and Crowdstorm, sites capitalizing on the buzz with opinion leading consumers sharing new finds; dealplumber a social network for deal savvy consumers to find, save and share deals; Shogging a social shopping search engine that allows shoppers to shop, compare, buy, and blog; and MyPickList, where consumers can receive an affiliate commission for products they recommend that are purchased through links propagated on blogs or social networking sites, etcetera, using a widget provided by the company.
Dancing to the new beat
So what does this mean for you and your business? If you’re not a retailer or a supplier in the retail chain, this information might be useful to enhance your own shopping strategies while gaining some economic advantage as you research and source products. For retailers, the implications are many. Not only do you need to think about how you tango with consumers to connect with them at the point of sale, both online and offline, but you have to think about how consumers are using the Internet in their information search and sharing process.
Another implication is that you should be monitoring what consumers are saying about your business. This monitoring has been facilitated by third-party providers like those referenced in my article “Brand Protection in an Age of Consumer Engagement. It also has been facilitated through technology tools at sites like TripAdvisor, which provide an RSS feed for those in the hospitality industry to subscribe to the latest reviews about their business, or to receive subscription e-mail updates that provide consumer feedback if you have a business listing at Yahoo Local, according to a recent article in The Wall Street Journal.
Beyond monitoring reviews if you have a competitive product offer, why not try to get it listed through one of the product search engines? This could lead to additional sales for your business.
* Dancing. Forward. Backward
Previous articles by Paul Gibler
• Outflanking the Google, Yahoo, MSN juggernaut
• Paul Gibler: On the case: Web lessons for connecting with customers
• Paul Gibler: Brand protection in the age of customer engagement
• Wireless wizardry coming to the small screen
• Paul Gibler: Podcasts – time, place, and player shifted media
• Paul Gibler: Virtual communities make online connections
• Paul Gibler: Lights, cameras, action: The state of online video
• Paul Gibler: Joining the wiki wacki world
• Paul Gibler: Would you like your music (and data) mashed?
• Paul Gibler: Cutting through the blog fog
• Paul Gibler: No RSS feed? You’re fired!
• Paul Gibler: Social computing in the Web 2.0 era