E-commerce Insights: The Online Retail 2.0 Ideas Tour

The Web is an essential channel for catalogers. Customers expect catalog companies to have effective, well-designed e-commerce sites. The Internet is undergoing a period of rapid innovation, often labeled “Web 2.0.” It includes tagging, visual search, wikis and Ajax.

Web 2.0 technologies will transform online retail over the next two years. Catalogers will need to upgrade their sites to remain competitive. I suggest you read this month’s column with a computer close by — as I’ll tour some Online Retail 2.0 ideas that will transform e-commerce.

The first stop is del.icio.us, the social tagging site. (Go to del.icio.us/catalogsuccess, and you’ll find a list of all links in this article indicated in print with underlines.) Del.icio.us allows users to organize the Web via tags, a so-called folksonomy.

To see power of tagging in retail, visit Etsy.com, a handmade goods site. Try searches like “knit hat,” “funny gift” or “squid.” You’ll get highly relevant results because of the user-contributed tags. Relying on the wisdom of crowds, customers may do a better job of organizing your products than your merchants. Tagging lets them do just that.

User-contributed content is central to Web 2.0 and Online Retail 2.0. You’re probably familiar with Wikipedia, the encyclopedia that anyone can edit.

Comparison Shoppers

The next stop on the tour, ShopWiki.com, brings the same concept to comparison shopping. ShopWiki lets visitors compare products from contributing retailers. It also contains thousands of user-written essays on topics such as men’s electric shavers, children’s car seats and women’s jeans. While checking out these articles, feel free to fix mistakes or add your opinion — all pages are open to edits from anyone. Before leaving ShopWiki, search for women’s jeans and note the “colors” button. Click the button and a color wheel pops up. Click a color and the search results page instantly re-sorts itself, first presenting the jeans closest to your color preference.

Consider your last two clicks: You stayed on the same Web page, but what was on that page changed. It’s fast, convenient and slick. Such pages use the magic of Ajax.

Coined by Jesse Garrett in February 2005, Ajax is a psuedo-acronym for Asynchronous JavaScript and XML. It’s a mash-up of three established technologies: JavaScript, XML and the special XMLHttpRequest call. XMLHttpRequest lets Web browser software grab data from remote Web servers asynchronously — users don’t have to twiddle their thumbs waiting. Ajax makes Web browsing snappy and interactive, much like desktop software.

Great examples of Ajax sites include Google Maps, Google Docs and Spreadsheets (formerly Writely and XL2Web, respectively), Wufoo, and Windows Live. If you haven’t tried these sites yet, check them out.

Downside of Ajax

A downside of Ajax is that such applications can thwart current Web analytics software. Because on-page actions happen without full browser fetches, your analytics program “sees” only one page view, missing the richness of user activities within the page. Omniture and other analytics vendors now are starting to offer software hooks that allow you to track visitor actions in rich Flash and Ajax applications.

Text search plays a central role in online retailing today. Visual search will command a similar role in the future. Visit Riya.com and try its visual product search. Riya offers search by image similarity, sketch and cameraphone functionality. By the 2007 holiday season, consumers in a retail store will be able to snap a picture of a handbag with their cell phone, upload the image to Riya and receive back listings of similar-looking bags online, all available to purchase through their PDA or Web-enabled phone.

Of most interest to catalogers — Ajax will transform online shopping. Soon online shoppers will shop by dragging items into their cart, either from static product displays or online videos.

The earliest drag-and-drop shopping demo I found is on Script.aculo.us, a JavaScript library. Web developers use libraries and frameworks to simplify Ajax programming. Besides Script.aculo.us, popular libraries and frameworks include Prototype, MochiKit, the Yahoo! UI Library and the Google Web Toolkit. Your programmers can use these established code bases to add rich, interactive effects to your site easily, and at no cost.

Easy Interface

Next up, Shopify.com. This platform offers a solid e-commerce platform with rich Ajax functionality as a hosted application. Pricing is 2 percent or 3 percent of monthly sales, depending on volume — no setup fees, no fixed costs, no servers to buy, no collocation fees, no database administrators and no programmers.

The Shopify interface is easy for shoppers and merchants, and the visual design is highly customizable. Check out the gallery of Shopify sites and you’ll find they look original, not like canned templates.

Large online retailers might turn their noses up at Shopify and similar sites as entry level options. At scale, major retailers need cheaper and more flexible solutions. But such platforms offer a cheap and fast way to test ideas for new brands, products and sites.

Here’s the low-risk, five-step recipe.
• Buy a good, permanent domain name—only $15 per year at Dotster.
• Hang a Shopify site off of it (zero fixed cost).
• Populate the new site with your great, new product ideas.
• Promote the new site.
• If the low-budget test site works, upgrade the underlying e-commerce platform to a custom site, if needed.

This approach offers catalogers a quick and inexpensive way to test new retail concepts online.

Rich, Visual Interaction

We finish our tour at Allurent.com. This new e-commerce platform offers a rich interactive experience. Users surf merchandise visually rather than reading and clicking text links. Product details pop up over layouts. Cart and checkout screens glide in and out of the frame as needed. Checkout is smooth. Assigning products to ship-to addresses is handled by drag-and-drop.

Allurent has flagship clients ready to launch in early 2007. Keep an eye on this new breed of online retail sites — I predict they’ll set the standard for new best practice shopping functionality going forward. Sooner than we’d expect, online shoppers will demand this easier visual metaphor, forcing all online retailers to follow.

Ajax, tagging, visual search, wikis — these are the start of Online Retail 2.0, and they’ll become increasingly common in 2007. Is your online store ready?

Alan Rimm-Kaufman leads the Rimm-Kaufman Group, an online marketing agency specializing in large, paid search campaigns and site effectiveness redesign projects. Reach him online at rimmkaufman.com/rkgblog.