SPECIAL REPORT
Search Engines Critical to E-Business Success

With global e-commerce revenue expected to approach US$2 trillion this year, it is hardly surprising that online stores are investing heavily in technologies that can convince potential customers to become repeat clients.

Search engines are one such "killer" technology because they play a crucial role in customer satisfaction, according to industry executives. "Forming a separate company to focus on e-commerce search is a natural progression for Amazon.com and its mission of helping customers find, discover and buy," said Alison Diboll of Diboll & Associates, which does marketing and public relations for A9.com, a Palo Alto, California-based company Amazon.com formed in October 2003 and launched in beta form Thursday.

"Amazon launched the new company to develop e-commerce search technology -- to give it both to Amazon.com and other licensed sites," Diboll told the E-Commerce Times. "More and more companies want to partner with A9 to take advantage of this technology."

At stake is the $82.9 billion expected to be spent online this year in the United States alone, according to ActivMedia. By 2006, U.S. e-commerce revenue could hit $130.3 billion, the Amherst, New Hampshire-based firm predicts. Meanwhile, spending on customer-facing e-commerce technology will increase 4.8 percent, according to Forrester Research. Some of those initiatives will focus on bettering the customer experience by improving usability and self-service, the research firm forecasts. Others doubtless will focus on search.

Off the Shelf

Indeed, enhancing the user experience was one of the goals of W.L. Gore & Associates' Web site update, said Joseph Zohlmann, who oversees e-commerce for the U.S. fabrics division of the company, which is best known for its Gortex fabrics. The company eventually selected a solution based on IBM (NYSE: IBM) WebSphere Commerce and the Atomz search engine, he said.

"We are very passionate about only doing things -- when our brand's at stake -- that are high-end, high-quality. We want ours to come across as a phenomenal brand at all times," Zohlmann told the E-Commerce Times. "In general, the search [engine] dramatically improves our goal for what the consumer's experience has to be."

Atomz customizes its hosted search solution to meet individual clients' needs, Steve Kusmer, CEO of the San Francisco-based company, told the E-Commerce Times.

"Every company is as different as the products they sell," he said. "The primary customization we do is working with the client on best practices. When we pull it all together, we work with them cooperatively to do good work."

Build To Order

Customization is crucial, agreed Laura Thieme, president and founder of Bizresearch, a full-service search engine marketing company that specializes in promoting retailers on the Web.

"We definitely prefer custom search solutions," Thieme told the E-Commerce Times. "It has been our experience that licensed search software does not do exactly what we need to convert the traffic at the highest rate. It is not to say that the solution does not exist. It is helpful to have custom programming in place that responds to the specific needs of each client."

Looking for a Difference

Indeed, search engines can differentiate competitors -- and e-commerce operators are aware of this, Chris Mann of IBM WebSphere Commerce product marketing told the E-Commerce Times. "They're putting dollars on the table," he said. "Its [value] is proven, and it's very consistent as you look from business case to business case."

For example, Gore's investment in Atomz paid for itself within a year, according to Zohlmann. "We would have been happy if it paid for itself in two or three years," he said.

There are cases where e-tailers see increased conversion rates of around 20 percent, Mann noted. Also, as a result of quality search capabilities, order size can increase by 18 to 28 percent. Although WebSphere Commerce works well with offerings from business partners Atomz, Endeca and EasyAsk, it includes guided-sell and parametric-search capabilities that many IBM clients use.

Use It or Lose It?

Anxious e-commerce execs need not look too far ahead to reach the next level of search-engine capabilities. Indeed, most sites do not fully use the capabilities of their existing software, according to Mann.

"I expect customers, in the next lifecycle, will make sure they're actually using these capabilities," he said.

Today, for example, site operators can tap into guided navigation, thesaurus, merchandise tactics, dynamic navigation and personalization. "There's an increasing amount of control these guys are giving to business users," Mann noted.

For her part, Thieme said: "I think we'll continue to see improvements in data integration software as so many retailers need their brick-and-mortar store data to match what's on their Web site, and vice versa. The only improvement we hope to see with content management systems and their Web integration is the need for search engine-friendly URLs."