Last week the top internet retailers in the country convened at eTail 2007 to learn what their peers are doing, listen to vendor’s pitches of new products and services, and to commiserate about the state of their industry. In my post from the conference last week I had commented on the recent lack of innovation in online shopping. Over the last three years merchants have moved progressively towards what has become a fairly homogenous online user experience that caters to the same mode of browsing and transacting as each other’s websites. Imitation may be a form of flattery, but if form follows function, then in the case of online shopping, banality follows form.
Online shopping has in reality been reduced to online transacting. Seek this one thing, find that one thing, maybe compare prices, then check out. 1 + 1 = 1.1 = something less than the whole. The building of desire? The premise that shopping should be engaging? Maybe at next year’s eTail. Or the year after that. Or never. Maybe it’s time to accept the fact that this is the business of ONLINE shopping, and not online SHOPPING. Maybe it’s about the medium and not the act?
That’s what it seems like today. The onerous burdens of the internet retailer to streamline technology and operations, to market the site in search engines, to keep their heads above the latest calendar-driven buying surge have driven innovation to the back of the “to-do queue”. Innovation - isn’t that the job of the next technology vendor? A slightly faster search tool, a multivariate test platform, a 0.05% improvement guaranteed or your money back technology elixir. All fine and well. But what if the industry could look out further than this month’s results? What if they could rise above the day to day grind? What is missing? I say at a high level it’s a sense of fun.
Fun? Yes, Fun! Not laugh out loud entertainment, at least not for most types of products. But how about at least a sense of discovery, of desire, of something a level above the pablum of the competition? If there are three basic pillars of online retailing, they would be operational efficiency, marketing efficiency, and conversions. A few retailers have achieved an operational advantage over their competitors via technology, fulfillment processes, and scale. Some have achieved an advantage of driving qualified traffic to their websites through search engines and affiliates. But who has led in conversions? Ask most industry experts and they will point to conversion ratios in order to rate the winners. Click to Product to Cart to Checkout. Mission accomplished in their book. They will pepper that user with some email campaigns, a discount here and there and wait for them to come back. Maybe they will type in the URL this time and save the retailer $1.50 charge from Google.
But what if shoppers came to your site because they really wanted to? What if they experienced something unique, engaging, even dare we say it: fun? There are several ways to express this concept in different terms. What if shopping online was more social, more collaborative, more educational, more engaging? What if ONLINE shopping became online SHOPPING. Or what if someone threw caution, and e.e. cummings, to the wind and capitalized both words, “ONLINE SHOPPING”, and created something worth seeing, doing, and doing again?
I think something is coming to help make online shopping fun. It just isn’t coming from retailers. It’s coming from outsiders like social networks where products can be promoted by buyers’ peers. Its coming from magazine publishers who are going to attack with a vengence. They will not bog themselves down with operational concerns, they will not seek to compete in the traditional online marketing channels as internet retailers, they already have traffic, and they will build more through word of mouth and the nework affect. The good ones will get stronger and more powerful at a very quick pace. These sites will not hold inventory, they will not plow money into google keywords, they will send their qualified, engaged traffic to the online shopping sites, for a fee. Their margins will be in the mid double digits rather than the high single digits of transactional websites.
So when People Magazine realizes that their InStyle website should not look like this but should look like this then users will flock to the site. The magazine will be useful online. It’s already engaging to users offline. Conde Nast is beginning to get it and they have a bevy of content to expand this vision. Scripps gets it and has a powerful stable of multimedia content plays to bring to bear.
These are the companies that help build desire, that help create buzz, that engage their customers through their multiple channels of content. While online retailers are homogenizing their shopping experiences the here-to-fore dormant giants that help build desire, and the new age social networks that have created communities that spread desire are preparing to close in and take the high ground. The high ground of traffic and lead generation. And retail shops will pay, a lot, for that traffic and for those leads, and thereby label themselves as low margin impediments to purchases rather than the high ground of creating desire and providing true value.
It might take a couple of years for this to play out. But I see this as something that will play out. And major retailers with a sense of initiative (and budgets) have a tight window to decide on whether they will invest in content, features and partnerships to bring the “fun” back to shopping. Or resign themselves to being transaction vehicles with an ongoing operational focus.
