Web 2.0 E-Commerce: A New Era of Competition

The online retail game has changed — again.

Your customers’ expectations are increasing. Will you meet them? Or will you miss them?

A revolution is taking place online. New Web technologies are providing a better, more interactive shopping experience and putting the power of shared community in your customers’ hands. A new era of competition has begun in which a rising tide will no longer lift all boats. Web 2.0, thought of mainly for its technological advancements, may be best remembered by retailers for the e-commerce ultimatum it provokes: Meet customers’ growing expectations or lose them to another site.

Web 2.0 technologies provide for heightened levels of interaction on Web sites, and consumers expect that same level of interaction when shopping online. These new and better experiences encompass online collaboration, social networking, and a closer simulation of an in-store shopping experience.

Fundamental Change in Measuring

This shift is already being seen in measurement tactics, as metrics trackers start to take into account time spent on a Web site rather than just the traditional count of page views. Recently, Nielsen//NetRatings added both “total minutes” and “total sessions” metrics to its service because Web pages that rely on Ajax technology or present streaming media can serve new content without reloading individual pages.

This fundamental change in measuring Web sites signals that new technologies are not just a fad for Web sites to experiment with but that they are behind a lasting transformation that is altering the way people shop online.

With interactive tools such as Ajax and various forms of instant consumer feedback, shopping turns into a conversation rather than a retailer-controlled monologue. Retailers should take advantage of these trends and technologies to improve their shopping and checkout experience.

As-It-Happens Responsiveness

Today’s shoppers are too impatient to use a site where you click and wait for the next page to load. Ajax (which stands for Asynchronous JavaScript and XML) allows single-page browsing and checkout processes, which save time and reduce shopper frustration and shopping cart abandonment.

Ajax technology pulls relevant data forward seamlessly, providing shoppers with a smooth, consistent view and sense of interaction rather than the experience of clicking on or through multiple pages to accomplish a task. It can be used for the basic shopping components of a site, such as product pages, as well as for more engaging features of shopping online, like recommended or recently viewed products, user-generated reviews, product demonstrations, assembling outfits, and tagging products with additional keywords.

This nimble, data-driven user interface provides as-it-happens responsiveness to improve the user’s experience. In a sense, it breaks the “grid” of the static Web site page by offering relevant suggestions and intuitive options based on the consumer’s choices as expressed by their online actions. Ajax introduces a sense of play and personality and optimizes screen real estate without crowding the goods.

Pairing Shoes With Handbags

Shoppers can now look for ways to pair up similar items, even those that are from different brands or sites. Mashups, one of the newest incarnations of Web 2.0 technology, are created using an application programming interface (API) to access the functionality of one Web site to integrate it into the structure of another Web site while a customer is browsing.

For example, 6pm.com, which Zappos recently acquired, uses a mashup to pair shoes with handbags, providing consumers with the option to accessorize. Customer reviews and comments on the pairings appeal to the very human need to know “what everybody else is doing.” Reviews can move your shoppers from consideration to purchase.

Just Looking

While mashups can pair similar items from different sites, smart retailers make it easy for consumers to compare and save items they are interested in while shopping on a single site.

Shopping carts are often used to store items for later consideration, but it’s not always possible to retrieve the contents of a shopping cart on a follow-up shopping visit or to compare items being considered in a single visit. People shopping in a brick-and-mortar store, for example, wouldn’t take each item they are considering to the counter one at a time and then go back for more merchandise, but rather would gather items together as they browse through the store.

By offering an online “thinking about” function, shoppers are able to consider products side by side just as they do in-store. With the contents of the “thinking about” area in plain view, shoppers can make an informed decision about which items make the final cut for purchase. Because the shopper doesn’t leave the page, the items they’re thinking about staying in clear view and top of mind. If the shopper leaves the site and returns at another time, any items that remain in the “thinking about” section will be there on the next visit.

Similarly, an “add to cart” function can be made available so that when shoppers are ready to purchase, they go to the shopping cart (or bag) and drag items into it from “thinking about.” Then, the shopping cart can offer more detailed images of products, provide more product information, even stock and inventory details and let shoppers easily edit their orders.

Listen Up

For years, retailers have ignored data that say user reviews are valuable because the content was difficult to manage, and they feared the impact of unfavorable customer comments. Part of the Web 2.0 creed of meeting consumers’ growing expectations is allowing their actions to have an impact on your site.

By granting some control to your customers through reviews and tagging, you’re actually creating a focus group that shows what they care about and what features or products you may want to showcase to drive sales. While only about 1 percent of online shoppers create this original content, 90 percent of them read it. What you learn from the reviews, while sometimes painful, can be good for business in the long run. Two of retail’s biggest players — Staples and Walmart — recently announced they’ll use customer reviews on their sites, validating the trend.

This growing social aspect of Web 2.0 will continue to influence the way people perceive your site. When walking down a busy city street looking for a place to eat, most people will gravitate to a location with customers already inside rather than an empty restaurant. Again, “What is everyone else doing?” Similarly, Web sites with an absence of customer community activity may soon feel “empty” compared to those that feel “alive” with activity and communication.

Online retailers must continue to assess Web 2.0 technologies and incorporate the functionality that helps them deliver the experience sought by their customer base. These new technologies help create online brand immersion, increase customer loyalty, and drive repeat sales. In the calmer waters of today’s e-commerce marketplace, it will take effective use of these new technologies to stay afloat.

David Fry is founder, president and CEO of Fry, Inc., an e-commerce design, development, and managed services provider.