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Marketing for the 21st century

 The Online Shopping Environment - How to improve it's impact on consumers and merchants.

IMS vision - there has to be a better way to shop !

Published Dec. 23 1998

"Online shopping is rapidly becoming one of the top Internet activities. Forrester Research predicts that consumer spending online will hit $180 billion by the year 2000, and Jupiter Communications estimates that U.S. consumer web revenue will grow to a staggering $300 billion by 2002".

The concept, displayed at Impulse Ads site brings merchant offers directly to consumers. How about taking it one step further and simplify the shopping experience for those consumers seeking bargains that aren't featured in the Ads. Great bargains are spread throughout the vast internet... now how to bring them to a buyer when he's ready to purchase becomes a daunting project.
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The problem

Online shopping today is an incomplete, fragmented, and often frustrating process. Try seeking  specific product information from a search engine query and you'll know what I mean! There has to be a better way to leverage Internet technology to assist shoppers in shopping for the right product at the right price. Only when the requirements for consumer acceptance-ease-of-use, depth of information, and security-are in place will online shopping realize its true potential for growth. In order for greater numbers of consumers to adopt the online shopping model, product information must be distilled, supplemented, and streamlined to form a seamless experience.

At the same time, merchants need a way to distinguish themselves from their competitors by factors other than price in order to flourish in an online environment. More and more consumers are choosing to shop by going through a destination site and being sent to specific merchants rather than finding the merchant themselves. As the number of merchants and the amount of information on the web continues to grow, consumers are embracing the easier alternative of referred commerce. And as this trend continues, merchants need a cost-effective way to attract customers and increase sales.

Similarly, destination and portal web sites are competing more fiercely for users by expanding the range of services they offer. To increase traffic and grow their community of users, these sites will have to deliver a shopping experience that addresses the full spectrum of consumer needs and also offer great pricing.


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When consumers decide to shop online, they approach the process with varying needs and degrees of information. For example, there are consumers who know exactly what product they want to purchase and need a complete listing of merchants who carry that product. To fulfill these requirements, a virtual catalogue and a listing of popular consumer product categories are necessary. How do we generated such a catalog to pin point the products a shopper seeks? Better yet how do you address "Impulse Buy" shoppers at the same time?

A consumer who has a general product need, but is unsure about what features to look for, needs access to editorial information from online trusted consumer authorities, detailed descriptions of product features, side-by-side comparisons of those features, and data sheets on each product being considered to reach an informed buying decision. For another source of information, consumers should be able to access consumer news group postings and discussion forums for community feedback.

thinking.jpg (5169 bytes)Finally, consumers who need more help and information before making a purchasing decision benefit from transaction oriented content, the idea of wrapping content around commerce. Consumers will be able to browse through content categories, find products and services that meet their needs, and purchase them in one seamless process. This marriage of advice, context and dynamically created E-commerce catalogs represents the future of online shopping. Looking for specific products should not be a time consuming venture. There has to be a better way!

For online shopping to continue its rapid growth, the shopping experience must evolve to seamlessly integrate commerce with content. This additional product information benefits merchants by providing them with a way to distinguish themselves from the competition by factors other than price. Those destination and niche' marketing sites capable of offering a complete, compelling, and engaging shopping experience for their community of users will have an enormous advantage over those who wait. But the expense of pulling all these factors together and updating the web pages with the ever changing product offerings is a daunting task.

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The Marketplace -adapting to shopping habits
Along with retail, wholesale ( business to business), and traditional direct sales( mail order), the Internet is positioned to become the fourth channel of distribution for commerce.

When consumers shop for a product in the physical world, they must gather information from different sources if they want to make an informed purchase. Traditionally, consumers research a purchase by talking to friends or colleagues and getting recommendations from a consumer magazine like Consumers Digest. Once they have decided on a product, they compare prices at various merchants, often by making phone calls or physically driving from store to store. Once consumers choose a merchant, they must verify that the item is actually in stock and available for purchase.

Online shopping today is only a slight improvement over this often frustrating and time-consuming process. Rather than driving from store to store, consumers can visit many merchants from the comfort of their own homes. However, consumers must still look elsewhere for complete product information and recommendations. They must navigate through many merchant web sites, clicking rather than driving, to effectively perform price and product comparisons. To fully realize the potential of online shopping, the experience must be seamless, easy-to-use, informative, and secure.

Consumers want a way to gather product information and recommendations from trusted sources, compare products by features as well as price, check on availability of products, and complete transactions securely and privately.

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How to create the perfect shopping experience & site

What consumers are looking for in online shopping is not just price comparisons but also product information. Since consumers can't actually touch an online product before purchasing, they want the product information, name recognition, and peace-of-mind that comes from buying an established brand from a recognized or rated merchant. ( i.e. notice that all Impulse Ads have merchant ratings by shoppers) The more information consumers were offered, the more satisfied they were with their purchases-and the more likely they were to keep buying online. The only cleavet to this shopper behavior is to concentrate a collection of merchants who guarantee the lowest price on name brand products at that given moment in time ..so price and quality combine for a "Impulse Purchase".

In a shopping experience that provides more than just price comparisons, merchants flourish as well. Since most of today's shopping technologies are little more than glorified search engines, merchants are able to distinguish their online storefronts from the competition solely by means of price.

This helps the MASS merchants who enjoy deep manufacturer discounts and are able to keep prices low, but hurts most others who can't compete with the big guys. In the physical world, merchants have other tools in their marketing mix, such as quality, service, selection, or delivery time. Similarly, to achieve success in the online shopping market, merchants need to be able to distinguish themselves by factors other than price. And with so many merchant sites on the web, they need an effective way to attract online customers, encourage bookmarks and increase repeat sales.

Similarly, destination and portal sites need a way to increase traffic and maintain their community of users in order to stay profitable. Studies show that Internet users are coalescing around a small number of sites that offer a full range of services rather than going to different sites for services like email, chat, Internet searches, informative content, and shopping. To grow their communities and maintain market share, destination sites need to expand the range of services they offer. As consumer adoption of online shopping continues to increase, so does consumer demand for a seamless, fully-integrated shopping platform at their favorite site. And as the market becomes even more competitive, destination sites will have to find a way to integrate commerce into all areas of their site, rather than confining it to a shopping channel.

Growing consumer acceptance of online shopping is driving both merchants' efforts to capture their share of online shopping dollars, and web destination sites' efforts to offer compelling, competitive online shopping to their users. However, online shopping must continue to expand its services. Consumers aren't looking for a shopping experience that replicates the often-frustrating process of shopping in the physical world, but instead are seeking one that enhances the process and removes the obstacles to consumer acceptance and enjoyment. Consumers, merchants, and destination sites alike want a safe, simple, and comprehensive online shopping experience that truly realizes the range and power of the Internet.


thinkng.jpg (14546 bytes)Problem: Shopping Process
Online shopping today is an experience marred by incomplete information and scattered resources.

If consumers are even able to locate all the product information they need online, they are often forced to sift through pages of useless information in order to find what they are looking for-and go to several different sites to find one with the product in stock. The Internet needs a easier way that traditional searches to assist shoppers. The information may be available, but it is very difficult to locate; listings are confusing, or not sorted by criteria important to the consumer. Many times, consumers do product research by talking to friends and looking up editorial information in consumer magazines. Armed with this information, they use the Internet for price comparisons and to complete the transaction with an online merchant. This frustrating process often sends consumers to multiple merchant sites containing incomplete product information about items that may or may not be available.

 

Unless this process is streamlined and simplified, online shopping will never realize its potential as a superior alternative to shopping in the physical world. IMS is looking for a way to leverage the high consumer acceptance rates fueling E-commerce's rapid growth. By overcome obstacles to ease-of-use, depth of information, and merchant selection we can put all the pieces together into build a dynamically generated universal shopping site. The process must be transformed to fulfill the needs and wants of consumers, merchants, and be private labeled for destination or smaller sites. A short cut to this monumental task is to create a desktop shoppingg application with the "PUSH" technology pioneered by Pointcast News in 1996 and broadcast the merchants hot sellers right to the desktop with an instant buy feature. One click purchasing or a browser linked request for more details direct from merchant site.

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The ideal mix

An optimal online shopping process would take into account these varying needs and degrees of information. For example, consumers who know exactly what product they want to purchase, such as a specialized exercise bike. They should be able to enter the product name, model, manufacturer, or description into a search engine to get a complete listing of merchants who carry the bike, both online and local. This listing should also inform consumers about product availability and whether the bike is in stock through a subscribing trusted merchant. Delivery, warranty, and return information should be provided as well. Consumers may also wish to explore alternate methods of shopping such as the opportunity to buy the bike at an online auction. Or, they may wish to check online classified ads for the chance to purchase a used one. A complete shopping platform needs to address all these sources of merchandise to provide a satisfying shopping experience.

 


In another example, a consumer may want to buy a mountain bike but be unsure about what features to look for. These consumers need a search engine with information organized into relevant categories that match the products most requested and sought by consumers. In addition to merchant listings, these consumers seek editorial information from a impartial respected consumer authority, detailed descriptions of product features, and side-by-side comparisons of those features to help them reach an informed buying decision. To address this need, a complete shopping platform needs to provide both editorial content and a way to compare features and learn more about each product.

Finally, there are consumers who are seeking even more context before making a purchasing decision. These consumers benefit needs identification, advice from familiar, respected subject-matter experts, product recommendations and comparison data, merchant selection, and transaction completion. They should be able to read articles on mountain biking that link to specific products, or maybe have an online fitness expert design a workout for them that includes biking and makes product recommendations. This content should address the same familiar market segment and universal product categories for a convenient, comprehensive, and seamless purchase process.

Only a shopping platform that incorporates all of these services and resources-commerce, comparison, community, and context-is a complete, integrated, easy-to-use online shopping experience. This platform indicates how online shopping must evolve by going beyond traditional methods to truly harness the power of the Internet.

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Requirements for ideal shopping system
We propose to successfully create a completely integrated online shopping process, with the following requirements:

First, a virtual catalogue of merchants and product information must be compiled into a virtual shopping site. To work well, it must be organized into universal product categories using a simple structure and common shopper's language. Otherwise, the same product would be listed under several different categories, making it difficult for shoppers to locate.  It must build a database by using specialized merchant drivers to search merchant e-commerce databases daily, update product information and availability, and combine this information into a universal listing of categories consumers can browse. Consumers can choose from a growing list of popular categories, including automotive, consumer electronics, entertainment, computers and technology, home electronics, fitness, and home and garden, health and beauty products etc....

Second, the shopping engine has to power consumer searches that potentially encompass thousands of merchants and millions of products, then provide a functional way of serving up the search results. To be effective, the data must be well-organized and easy-to-use. It should also search the full range of locations where the product may be found, such as online merchants, auction sites, online classifieds and local yellow pages listings. When a consumers requests a search, the results should be presented in an easily understood manner with the added functionality of providing detailed merchant information upon request, including product descriptions, availability, shipping policies, return policies, and maps and driving directions to local offline merchants too.

To achieve success in the online shopping market, merchants need to be able to distinguish themselves by a factor other than price. When consumers were able to get product information and compare quality, value added services as well as price, they were willing to pay a higher average price. Repeat business also means a higher average purchase amount, according to a 1998 Binary Compass Enterprises study of over 32,000 online shoppers. Researchers reported that the average purchase amount for a repeat customer who has made six or more purchases from the same merchant is $208, compared to $109 for first-time shoppers.  -Pointcast News Nov.1998

Therefore, a complete shopping solution must provide merchants the opportunity to further distinguish themselves by methods such as placing targeted ads on relevant pages or offering incentives to purchase from their particular store. In addition, if the aggregate transaction data were collected and reported to merchants, they could improve and increase their targeted marketing, upselling, and cross-selling efforts, just like with Impulse Ads merchant reporting system.

Dilemma for traditional sites:

With the continued increase in referred (affiliate) commerce, like the Amazon.com plan, comes a corresponding decline in consumers going directly to non aleigned merchant sites. More and more consumers are choosing to go through destination sites to reach merchants instead of spending the time to locate and visit individual online storefronts via search engines. Merchants who don't benefit from referred commerce are seeing shrinking market share as consumers continue to flock to destination sites for all their Internet activities. And with the proliferation of merchant sites on the web, merchants need an effective way to attract online customers and increase sales.

Third, consumers may require assistance identifying their needs and finding products that meet those needs. A successful shopping system must be able to provide not only pricing and availability information, but also editorial and community-based information to allow consumers to make informed purchasing decisions. A " Comparison Guide" is one example, with editorial content from recognized, respected sources such as Consumers Digest for product feature comparisons and Best Buy recommendations in several product categories, PC Order for computer hardware information with online knowledge base for incompatability alerts, or DejaNews and Delphi for community-based information on thousands of products and services.

Currently, sites offering online shopping are forced to hand their visitors over to merchant sites to complete transactions ( redirect hard to get traffic). Since web sites are dependent on traffic, this practice runs counter to their ultimate business objectives. Stickiness, or being able to keep consumers on one particular site, encourages user loyalty and helps destination sites maintain their communities. To grow their community of users, destination and portal sites need to deploy a seamless, integrated shopping platform that fulfills the needs of consumers by providing product, editorial, and price information in an easy-to-use format and build revenue from repeat sales.

The Solution can we find it ?

To address the needs of consumers, merchants, and site owners, IMS will propose to industry giants to design a modular, scalable, and flexible infrastructure that integrates all aspects of the purchase process into a single technology suite. This complete shopping solution will consist of a Merchant Selector, Comparison Guide, and Shopping Assistant. It must be able to be private labeled and customized to each site owners preferences.
Each component will work together seamlessly to support the online shopping experience, from complete merchant listings to editorial information to comparative shopping by feature. The resulting technology will be built to be private-labeled and integrated into both high-traffic web sites such as search engines, online communities, and destination sites and benefit the smaller online retailer as well.

The Comparison Guide will be designed to enable consumers to read detailed information on available features for a particular type of product, decide which features are important to them, and enter any other preferences such as size and price. The   Comparison Guide will then display all the searchable or featured merchandise that matches the shopper's criteria in an easy-to-understand format. The consumer should be able to view comparisons of the closest matches, or click on a product for a printable data sheet with product specifications. When consumers decide on a product, the "Merchant Selector" kicks in and  will generate a complete listing of trusted merchants.

All sites that implement this "Universal Shopping Engine" can benefit both by attracting new visitors to grow their communities and by retaining their persistent traffic. With affiliate coding and tracking linking directly to subscriber merchant E-catalogs, transactions can be executed from the host site without passing the consumer to the merchant site. The infrastructure should be a seamless solution that is architected to let consumers conduct multiple transactions with multiple merchants all in one execution.  The Virtual shopping site generated should hundreds of sites, thousands of merchants, millions of products, and multi-millions of transactions.

Future of Online Shopping

As online shopping continues to evolve, merchant relationships and consumer patterns will be established rapidly. Any site capable of offering a complete, compelling, and engaging shopping experience for their community of users will have an enormous advantage over those not willing to leverage new technologies into their marketing mix. Since consumers control the whole Web experience they are seeking  ways of managing the enormous volume of available information on the Internet. Sites that are able to distill this consumer information and present it in an easily understandable format will become the preferred online shopping venues. The platform adopted by these sites must be modular, flexible, and scalable in order to be compatible with sites that grow rapidly and change frequently.

With the proliferation of online merchandise, consumers will demand a more varied selection of products that are at the same time tailored to their specific needs. They will turn to online shopping for an experience that seamlessly leads the shopper through every step of the purchase process to deliver a product that precisely meets the user's needs. This "personal shopper" concept is the model for the next level of online shopping and we propose to incorporate this " vision into a reality".

 Terminology:

Affinity sites
Sometimes called destination sites, these sites have a loyal community of users who seek out a particular site for its specific content. Affinity sites are growing their user communities by increasing their range of services to include offerings such as online shopping.

Destination sites
These sites have a loyal community of users who seek out a particular site for its specific content. Destination sites are growing their user communities by increasing their range of services to include offerings such as online shopping. They are comprised of a range of sites including portal, affinity, community, sports, news, and sites specializing in other content areas.

Affiliate Site
A private labeled version of the "Universal Shopping Engine" is displayed at: High-Traffic Sites (such as search engines, AOL, Netscape, MSN etc.); Vertical Sites (targeted at specific vertical market segments); Yellow Page Providers (online directory services); and Consumer Internet Service Providers (ISPs) and Cybermalls or free hosting sites like Geocity's.

Portal sites
These sites provide a full-service environment where consumers can send email, read news, access stock quotes, search the Internet, and shop online. Portal sites are becoming increasingly popular as consumers seek one site to use as a home base for all their Internet activities.

Referred "Affiliate" commerce
A rapidly growing part of overall web commerce, referred commerce describes consumers who shop by going through banner Ads and catagory listings at destination or portal sites rather then directly to a merchant through a search engine. Referred commerce is driving the coalescence of consumers around a few portal sites, which contributes to the difficulty individual merchants are having in attracting shoppers to their sites.

Shopping Assistants

Built-in  Shopping Assistants are capable of stepping the consumer through any stage of the purchase process, from needs identification to transaction completion. The integrated shopping infrastructure will consist of the Merchant Brand Selector, Comparison Guide, and the intelligent Shopping Agent. The Impulse Ads concept will suppliment this as a additional means of displaying product specials at the same sites for impulse shoppers.

New wave in advertising - "rich media" or transactional Ads that combine revolving real time offers and instant purchasing to provide a way for small sites as well as destination sites to deploy online shopping in all areas of their web, not just within single stores. Consumers will be able to reach out beyond their chosen portal to product information, availability, pricing, and merchants where they can purchase the right product while surfing the net.

Impact of the above IMS vision is born out by similar strategies just announced in March 99 by Microsoft as their ecommerce innitiative. Amazing how the big guys eventually adopt some of IMS visions into their business plans.

nerd.gif (618 bytes) The editor for IMS and Get-in2

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IMS -Ecommerce newsflashes -November -Small business Tax Credits work for everyone

IMS for web site marketing plans Latest news from our editor

Get-in2 is being remodeled into a more visitor friendly format. New sections are being added to this shopping community which will offer Java Chat, forums, FREE web sites and POP3 E-mail accounts. Our Outlet and FleaMarket sections will allow the smaller merchant a chance to get their "Feet Wet" on a limited budget. More information in our Outlet area.

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