From Bricks to Clicks (and Back) with the Aid of Search

Apr 20, 2006 7:52 PM  By

Chicago’s geography and settlement have given it a long history of making and selling furniture. Easy access to the lumber of Wisconsin and Michigan, a large contingent of Old-World cabinetmakers from Germany and Scandinavia, and even the abundance of leather, hair and glue from the nearby stockyards all helped make the city a national power in furniture manufacture after the Civil War. Windy City retailers used those resources to lead the way in national furniture marketing, too, selling through catalogs, inventing installment buying, and even building their own showroom, the American Furniture Mart on Lake Shore Drive, in 1924.

Eighty years later, furniture making has largely left town for North Carolina and Virginia. Furniture retailing has also changed. No more behemoth brick-and-mortar showrooms; the Furniture Mart is now lakeside condos. Chicago mail-order institutions like Sears and the lamented Montgomery Ward play a much lesser role too. Now a retailer who wants to sell furniture or home furnishings builds Web sites, not bedroom sets, and signs outsourcing deals rather than storefront leases.

Home furnishings retailer Chiasso encapsulates that transition. The company was founded in the late 1980s by a Chicago entrepreneur who traveled to Chiasso, Italy, and was taken by the bright and colorful home décor items she found on sale there. She signed deals to start bringing them to the U.S. and sold them in a handful of stores she opened around her home town. In the ‘90s, the small chain was bought out by a venture capital firm that invested lots of cash, opened 17 stores in high-traffic malls around the city’s suburbs, and launched a Web site and a mail-order catalog.

But plans to turn Chiasso into another Restoration Hardware turned sour when mall traffic dropped off after 9/11, and the owners went bankrupt in 2001. Two years later, Greg Kadens and a friend stepped in, in search of a marketing opportunity but with no interest in physical stores. They bought only the Chiasso brand and its direct-marketing assets—the catalog and the e-commerce operation.

In the beginning, the catalog was the primary sales channel, partly because the online store was fairly far behind the technological curve. “That Web site dated from about 1998, and we put $40,000 to $50,000 into it right away to improve the functionality and give the site a facelift,” says Kadens, now Chiasso’s COO. “But even so, we knew that we didn’t want to live with the thing long term. It wasn’t stable, and there were integration issues with our outsourced call center and fulfillment vendor. So we didn’t intend to be on that platform for long.”

In April 2005, Chiasso began a top-to-bottom renovation of its Web site to add features, ease navigation, improve integration with back-end systems and give the site a sleeker look to suit the retailer’s high-style offerings. The renovated site went live in October of last year and seemed to work well. But it soon became clear that one additional fix was needed: Chiasso’s home-grown site search was costing it customers. The internal search feature for the Web site was rigid, hard for shoppers to use, and cumbersome for the company’s in-house IT to maintain.

“We didn’t really think much about our site search when we were redesigning the Web site,” Kadens admits. “It was kind of an afterthought, and that was a mistake, because it was holding us back.”

So in December 2005, Kadens and his team reached out for search help from Cupertino CA-based SLI Systems, which offers a hosted site search function that “learns” what products customers are looking for and displays them prominently among search results.

SLI’s Learning Search hosted application aggregates searcher behavior on the site, learns which search results they click on most often when searching on a specific keyword and then makes sure those results are on top for subsequent searches on the same term.

“The basic value proposition of our Learning Search platform for an online retailer like Chiasso is that people are more likely to find what they’re looking for when they search the site, so they’re more likely to make a purchase, and conversion rates go up,” says Shaun Ryan, CEO of SLI Systems.

So Chiasso took advantage of a month-long free trial of SLI’s Learning Search Web service. At the same time, the company also signed on to try SLI’s hosted site optimization service, Site Champion. This application integrates with Learning Search, examining the behavior of searchers on a term to discover other keywords they have also been most interested in on a site and using those additional terms to generate additional search suggestions automatically. Besides maximizing shopper options, this creates links that search engine spiders can follow to other results pages, where the keyword appears naturally in the title, link and page content. An online retailer’s results pages are thus much more likely to be indexed by search engines, and more traffic is driven to the site.

That’s not quite been the case for Chiasso. Kadens says traffic increases to the site have been relatively small since SLI began lending a hand. But more importantly, Web sales conversions have increased by 25%. While some of that could be attributed to the overall redesign, Kadens believes that improvement is due in large part to better site search capabilities.

“We think customers are finding what they’re looking for from us much faster and more reliably,” he says. “And about 25% of our sales each month are now unsourced sales, meaning that we didn’t mail that person a catalog. He or she is finding us on the Web, which is great.”

And giving customers the Web shopping experience they want has become much more crucial to Chiasso in recent months. “We’ve seen a big shift in our sales channels; a year ago, we were getting about 40% of our sales through the Web site, and now it’s 60%,” Kadens says. “That’s a big win for our company, because we outsource our call center. Those calls cost us 70 cents a minute and last four minutes on average, so that’s $2.80 added to the cost of each catalog sale.”

With site search and optimization apparently buttoned up, the next items on Chiasso’s agenda include further enhancements to the Web shopping experience, to include features such as 360-degree views that will help sell large furniture pieces more effectively. The online store sells accessories and furnishings very well, Kadens says, but large furniture such as sofas and love seats are a hard sell on even the best-designed Web site

Ironically, that effort to give shoppers a better look at Chiasso’s large items is driving a return to the world of bricks and mortar. The company will open a first 3,000-square-foot showroom this May in an affluent Chicago neighborhood. And that should be the first of many.

“We’re not going into this to have just one store,” Kadens says. “We’ll look at opening more stores in Chicago, but we’ll also look at opening units in California and New York. Those are areas where our catalogs do well, on the coasts. We know through our database where our customers are, and that’s where our stores should be.”