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Extreme E-tail: Sell the Product, Sell the Search, Sell the Space

Extreme E-tail: Sell the Product, Sell the Search, Sell the Space

The holidays are months away, but e-tailers should already be well under way in planning how to best take advantage of the November/December traffic surge. Now is the time to look at ways to drive your site's incremental revenue with tactics like adapting brick-and-mortar practices to the Web and monetizing your in-site search results page.

By John Federman
08/12/09 4:00 AM PT

Though it's only mid-summer, retailers are knee-deep in finalizing their holiday plans. This season, they are under extraordinary pressure to generate as much revenue as possible from their online stores, which -- for many -- is their best performing channel. With only a few short months before retailers' scheduled e-commerce site freezes, now is the right time to explore the innovative, quick-to-implement projects that will drive incremental revenue during this critical sales season.

Taking cues from brick and mortar stores, where every square inch of real estate is carefully planned and, more often than not, monetized, is the ideal starting place for retailers looking for a smart and simple way to turn on a new revenue stream. Imagine capturing the attention of the millions of shoppers who visit your online store and being able to turn their interest into a profit center. Your site features valuable real estate that can maximize profit and even subsidize other site upgrades with minimum investment or disruption to the retailer.

If It Works In-Store, Why Not Try It Online?

Retailers spend a tremendous amount of time and energy testing in-store merchandising strategies to garner maximum attention and interest, building unique promotional units, offering eye-level shelf space and displaying engaging end-caps and kiosks, especially during the holidays. However, with the same units unavailable in the online world, how do they leverage such tried and true strategies and apply them to the Web with the same success? Is there a virtual equivalent of the in-store display or end-of-aisle signage on e-commerce sites? The answer is yes, and it is an untapped resource that with a little effort can turn virtual shelf space into a true profit center.

Online retailers have already begun to experiment with ways to adapt in-store merchandising practices to the Web, with varying degrees of success. An obvious tactic is site-side advertising, and while it does create a potential revenue stream, it can be costly and crowded. Worse, it can actually lift shoppers right out of the online store, sending them to a manufacturer's direct sales site. Tactics that hasten abandonment don't exactly make for a mutually beneficial partnership between retailer and manufacturer.

A more thoughtful approach is to sell manufacturer-specific branded "merchandising zones" in the form of banners, custom editorial and creative or even, in some cases, branded landing pages. Products can be showcased in a "Featured Product" or "Deal of the Day" box. Done correctly and with full merchandiser control, this approach creates a vast inventory of virtual end-caps, boutiques and shelf-level displays that fit seamlessly into a retailer's well-crafted and differentiated customer experience -- benefiting manufacturers, retailers and customers alike.

Monetize Your Search Results Pages

With online shoppers starting their searches on retail sites at a greater rate than on search engines, it makes sense for retailers to offer manufacturers an opportunity to boost their on-site visibility by leveraging some of the tactics of paid search. Imagine being able to apply cost per click bids to advantage a manufacturer in garnering premium position within a search list, or any section where products are presented. Unlike paid search solutions offered by the search engines, the traffic stays on their site.

The most basic tactic is through relevancy weighting, a technique many site search vendors promote as "boost." Site search specialists leverage factors like margin, inventory, price and popularity to influence the order in which products are presented. Retailers commonly apply additional weighting to ensure that, for popular searches, specific results are returned first. This tactic, known as "searchandising" -- the combination of on-site search and merchandising -- offers the ability to easily integrate manufacturer bids as a new factor that can be applied to sort order resolution. Manufacturer bids can be used to break ties between similar products or as part of the overall sort algorithm, and as with other weighting approaches, merchandisers maintain ultimate control on how these factors impact final search results delivery.

A similar approach is to adopt a Google-like tactic of clearly denoting sponsored results above, alongside or even within a results list. This "callout" tactic gives merchandisers the ability to clearly distinguish sponsored results versus naturally returned results, while ensuring that manufacturers can prominently feature their products on the coveted first results page, where more than 70 percent of shoppers click.

Strengthening Brand Partnerships, Creating New Revenue Opportunities

By taking a closer look at their sites, retailers will quickly realize all of the untapped real estate that could be generating incremental revenue in a matter of days. As brands finalize their holiday promotions, retailers should be determining which products they'll be heavily promoting and offer their partners premium placement for those products on a pay-per-click basis.

Not only is this an economical option for the brands since it is pay-for-performance advertising campaign, but it also puts their products in front of shoppers while they are in the buying mindset, increasing a retailer's revenue potential by improving (paid) click-throughs and conversions.


John Federman is president and CEO of Searchandise Commerce.


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