The Road to Riches

May 15, 2005 9:30 PM  By

From Flash animation to video to drag-and-drop, new Web technology can provide more-dynamic online shopping experiences and more depth of information and convenience for e-commerce customers. Of the nation’s 71.5 million Internet-enabled households, more than 98% have a Flash player, according to research firm NPD Group, and 87% can read Java. What’s more, 36% of online households have broadband access, according to research aggregator eMarketer. This combination of faster Web access and advanced desktop technology means that most Web users can accommodate at least some form of multimedia Web technology — a.k.a. rich media.

Rich media offer online marketers the alluring prospect of product presentations that boost sales and integrated analytics that make the most of the data generated by the Website. But do customers really need, say, streaming video to help them decide which bathing suit to buy? And is the cost of the technologies worth it?

A wealth of rich media

The answer to both questions is a definite maybe. According to Doug Mack, CEO of Scene7, an e-commerce imaging software company based in Novato, CA, products presented online using rich media often show double-digit sales increases. Scene7′s core solution, Dynamic Imaging, “allows retailers to generate higher-quality, higher-resolution images and lets the consumer actually zoom in and get deep visual detail on the product image,” Mack says. “It produces happier customers who buy more because they get better visual information.” Scene7 technologies provide such features as swatching capabilities for soft-goods merchants (showing the same clothing item in different colors), zooming in on thread-level detail of fabric, and allowing customers to change room layout elements on a homebuilder’s site.

Ken Burke, founder/CEO of MarketLive, a Petaluma, CA-based e-commerce technology provider, goes so far as to say that zoom technology is “required this year.” The second feature Burke would opt for is video, especially for demonstrating the mechanical features of electronics or housewares. He also believes that audio vignettes are good value, “easy to implement, cheap to record.”

For Ed Foy, president/CEO of Brick, NJ-based eFashion Solutions, which represents the online operations of more than 20 apparel manufacturers, incorporating rich media onto a Website is an exercise in balancing image and product. “The fashion industry wants to look like all flash and flair, and we want it to look like Amazon — Amazon is all about product,” Foy says.

The eFashion Solutions site was built using Flash, XML, and static HTML; it now includes live chat as well. But the real accomplishment, as far as Foy is concerned, exists behind the on-screen face of the business: The Website is completely integrated with back-end operations and analytics, all programmed and built based on open-source code.

In addition to balancing branding and selling, online merchants need to balance costs and ROI. The many variables associated with rich media make it difficult to assign even a range of costs for implementation. Obviously, adding a little Flash to a Website will cost less than hiring a team of designers and integrators to develop a new type of checkout system like the one T.J. Maxx uses, or a wardrobing program such as that used by Gap Direct, or Home Depot’s room layout feature.

Also, models for implementing rich media can be highly flexible. Scene7, for example, offers services ranging from complete design and integration to a less expensive eCatalog solution that operates on more of an application service provider (ASP) model.

David Fry, president/CEO of Ann Arbor, MI-based multichannel technology and Web design company Fry, estimates that just setting up dynamic zooming capability on a site might cost $20,000, “But if you want to do something really complicated, like drag-and-drop wardrobing, that could be $2,500-$5,000 a month in server costs, depending on your volume.”

And volume may be a prerequisite to achieving a rapid return on investment. Suppose, Fry says, a $2 million cataloger implements rich media at a cost of $200,000 and sees a 10% increase in sales, to $2.2 million. Assuming a gross margin of 40%, “you’ve just gotten an extra $80,000 gross margin on that sale that wasn’t worth the $200,000 cost,” Fry says. “But if you’re a $20 million company, then the 10% increase is worth it.”

Taking it slow

Because of the uncertainty regarding ROI, multichannel marketers tend to come down on the side of caution in installing rich media. Many try to keep costs down by relying on their own staff to handle the customization and integration. For instance, New York-based Direct Holdings, which also owns gifts catalog Lillian Vernon, installed Flash on its Time-Life Website last year using mostly inhouse staff, says public relations director David Hochberg. The addition of the technology, therefore, was “not a big investment,” he says.

Hochberg would not disclose information about results. But he does offer this piece of advice: “Investigate the use of rich media on a case-by-case basis.”

Max Harris, director of e-commerce for Burlington, VT-based Gardener’s Supply Co., seconds that suggestion. The company completed a test deployment for a rich media version of its print catalog in 2003. “It had some value,” Harris says, “but in terms of tangible ROI, it was a little bit tenuous for us.”

Instead, Gardener’s Supply and associated brand Dutch Gardens have developed a few rich media applications inhouse, including a multimedia tour of greenhouses; the Cushion Finder tool on the Gardener’s Supply site, which helps customers find the right shape of cushion for their outside furniture; and the Plant Finder tool for Dutch Gardens. This last tool, Harris says, “allows customers to input what we call cultural attributes, so they can say, Give me all of your plants that will grow in low light, will bloom in summer, are yellow, and are pest-resistant’ or what have you. They can select different criteria, and that pings a database, and then it spits out a page of results for all the plants that meet those criteria.” But both Websites also provide an alternate user interface so that customers can choose to use the rich media utility or go to a standard Web page to look at product.

Harris admits that some of the newer technology is enticing, but he definitely recommends testing technology via site analytics programs (Gardener’s Supply uses Omniture) or even e-mail marketing to get a sense of what the ROI for a particular technology might be. In sum, Harris says, “We’ve been really cautious not to overbuild and not to fall in love with technology, and that has served us well.”

Back to basics

All the frills and furbelows in the world won’t boost sales if your content and merchandising aren’t effective to begin with. Before you start enhancing your site with rich media, says Fry, you should audit your current capabilities.

Make sure that the site functions well even when handling maximum information loads. “Is it responsive, is it fast, does it crash, how is your point of connectivity to your credit processor?” asks Fry. And be sure that you’ve got your onsite search process optimized. (For more on improving your onsite search, see “On-target, onsite search” in the March issue.) Only when you have those issues under control, Fry says, does it make sense to consider adding bells and whistles.

And keep in mind that there are definitely some situations in which customers don’t care to see enhanced images or use fancy utilities. From nine to five on weekdays, the eFashion Solutions site has a demonstrably greater conversion rate if the images have lower resolution and are quicker to download, Foy says. Analyzing the data leads to a simple, perhaps obvious, conclusion: “We know that at work, you don’t care if the image is so clean and crisp,” he says. “You just want to see it real quick and get off before your boss sees you.”


Barbara Arnn is a freelance writer and editor based in Port Townsend, WA.