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The Shifting Online Retail Market: Video, Mobility and Personalization

By David Reisfeld, General Manager, Content Delivery Solutions, Limelight Networks


David_Reisfeld_HeadshotThe electronic retail experience today is nothing like it was five years ago, and it’s unrecognizable from e-Commerce at the turn of the millennium. Despite the fact that many online shoppers have been doing business on the web for years, the types of transactions, expectations of quality, and on-site behaviors have all changed dramatically.

There are three major trends to watch in the growth of online retail: the use of video in online marketing and sales, the growing importance of mobility, and an increasing emphasis on personalized shopping experiences.

Video Takes Over
The video trend is evident just by looking at some of the largest online retailers today. Amazon, for example, incorporates both manufacturer videos and video reviews from consumers in its product pages, and Overstock has publically stated its goal of including a video with every product it sells. According to the 2010 eMarketer report Video E-Commerce: Innovative Models Drive Sales, retailers report higher conversion rates and fewer abandoned shopping carts when they add video to their sites.

An independent survey commissioned by Limelight Networks supports the idea that video is important to online shoppers. According to survey results, video product demonstrations and video reviews from customers were listed as extremely or very important features by 46% of survey respondents who reported making personal online purchases more than once a month. And of those listing video as important, a significant percentage said they spent more than $300, and up to $1,000 annually in select online shopping categories. Put briefly, video is an important feature to many of the consumers who spend a larger amount of money online.

Online And On The Go
Turning to mobility, the opportunities for online retailers are numerous, but equally, new mobile distribution channels are adding complexity to the retailer/consumer relationship. From mobile sites to branded apps and mobile payments, retailers have a wealth of resources to draw on in engaging audiences and building brand loyalty. There are also new cross-platform tools like QR codes. These 2D barcodes provide a way to activate a brand for consumers when they are already in front of a product and actively seeking more information. QR codes can lead to detailed product specs, video demos, customer testimonials and more.

Tied to applications like QR codes, there are difficult new challenges in reaching consumer audiences to consider. By far the most critical aspect of mobility is the compatibility of online sites, apps and advertising across the wide range of gadgets available. Tablet devices were the big trend at the 2011 Consumer Electronics Show, and when you include the number of new tablets launching this year with the increasing popularity of smart phones, the mobile landscape is both complex and incredibly varied. All of these devices act as potential access points to a retailer’s brand, which means how your site, app or ad plays across the lot of them impacts how consumers perceive your company and its products or services.

Personalizing The Experience
The personalization of online shopping is being driven both by the ability to act on more in-depth analytics and the rise of social networking. From an analytics standpoint, it’s easier to track online behavior now, and also to customize the information being presented to a consumer based on that data. That customization can take many forms, from addressing someone by name on a site, to saving a visitor’s shopping preferences, to targeting specific products or discounts to a consumer based on past purchasing trends.

Social networking offers a different look into how the shopping experience is becoming more personal. Hitwise found that social networking and community forum sites ranked third as a traffic driver to department stores online behind only search engines and other department store sites. Traffic from social networking sites to the Retail 500 also increased 27% in December of 2010 compared to December of 2009. All this means that conversations taking place online among friends are guiding subsequent shopping behavior. For retailers, the message here is that online presence must extend beyond traditional branded web sites and into the social networking arena. These spheres of personal interaction online are where consumers are forming many of their opinions, and increasingly where they’re choosing their shopping site preferences.

Of the three major trends in online retail discussed here, each demonstrates a tangible shift in the industry. All three trends will continue to manifest in online retail throughout the next five years and likely beyond, but they will also begin to overlap more heavily. New implementations will blur the lines between strategies and take advantage of the benefits each has to offer.

David Reisfeld is the General Manager for Content Delivery Solutions at Limelight Networks. He is responsible for the strategy and development of Limelight Networks' enterprise solutions portfolio. He joined Limelight Networks in January 2010 to spearhead Limelight's penetration into the whole site delivery space catering to e-Commerce and enterprise portals.  Prior to joining Limelight Networks, Reisfeld spent 10 years in the content delivery network industry.

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