Rich Internet technologies can make your Web engaging for customers and more profitable for you

Reader ROI

• New technologies that improve the online customer experience
• How technology can be a business differentiator
• The business benefits of Web site upgrades

US consumers love e-commerce so much that despite growing fears about identity theft,they spent $US 172 billion shopping online in 2005, according to Forrester Research. Australian consumers aren't racking up numbers anywhere near that spend (even proportionately), mostly because local online shopping offerings here are so mind-bendingly awful. But the very nature of the Web has dissolved borders and what the discerning buyer can't get online locally, he or she can purchase - or research - overseas. And on the Web, customers tend to be more fickle and price-sensitive than they are when shopping at the mall.

According to a recent study by BizRate and Shopzilla, 59 percent of online shoppers use search engines and aggregator sites like PriceGrabber to research products and compare prices before they go to a particular merchant's site. In the virtual world, companies have always been challenged to make their Web sites user-friendly and engaging so that when the customer gets to their site, he sticks around and spends some money.

However, differentiating Web sites is becoming easier for companies thanks in large part to the proliferation of broadband in US homes (another local black mark). Among US households with Internet access, 40.1 million have broadband connections (about 3 million more than use dial-up), according to eMarketer, a market research company. With more consumers accessing the Internet via broadband, companies now have the opportunity to create competitive advantage by deploying flashy new technologies that will make their sites more engaging - and thus more likely to keep customers shopping.

These bandwidth-hogging technologies, which include Flash, bots and multimedia, as well as the trendiest of the bunch, Ajax, aren't accessible or practical for users with dial-up connections. These technologies enrich and enliven the online shopping experience. In the case of bots, they can improve customer service, while Flash, multimedia and Ajax can make the entire process of shopping more intuitive (for more on Ajax, read "Ajax Arrives for the Enterprise", CIO March). Some companies are also using the next generation of Web monitoring tools, which enable them to track individual consumers' online behaviour in real time, to identify precisely how to improve their sites.

The point of these technologies, says Troy Brown, senior director of e-commerce for boot-maker Timberland, is to "replicate in the virtual world the experiences people have in our stores". Leading-edge companies such as Timberland, Ikea, auto auctioneer Manheim and Safeway.com have increased their transaction sizes, boosted conversion rates of visitors to buyers and improved customer service by deploying advanced Web technologies.

Your company can achieve positive results too. Here's what you need to know in order to keep customers returning to your Web site for more.

What's Wrong with What You're Doing Now

HTML is the cause of most of the usability problems associated with e-commerce. The programming language was developed for linking scientific papers and retrieving information, not for multi-step transactions such as ordering galoshes online, says Fumi Matsumoto, co-founder of e-commerce vendor Allurent.

Yet it became the standard for e-commerce because it was the standard for delivering information to a variety of operating systems and browsers. Furthermore, most consumers used dial-up modems to access the Web in its early days. HTML was simple enough for dial-up connections to digest, so that Web pages didn't take 10 minutes to load, says Darryl Gehly, vice president of Molecular, a Massachusetts-based Web design company. Because most e-commerce sites used HTML, and those sites were designed to accommodate the slowest computers, all Web sites began to look and function the same way.

"The main way you shop, by clicking on categories and drilling down until you find or don't find what you're looking for, is the experience everywhere," says Matsumoto. But that's no way to make your brand stand out from hundreds of others in the Web universe, or give customers any reason to return to your site a second time. What's more, the kludgey user interface has led to shopping cart abandonment rates of more than 50 percent, according to Forrester.

The solution to e-commerce's problems is rich Internet applications. These are mini-applications that run inside a browser and function like desktop applications in that they respond instantly to user input. For example, rich Internet applications let users drag and drop images and text without having to get information from a server to refresh the page. They also enable information to pop up automatically when a user rolls her mouse over a graphic. Rich Internet technologies work by taking advantage of the capabilities in browsers, such as Flash plug-ins, that support such functions, says Gehly.

Because these technologies make online commerce more fluid and intuitive, they can reduce shopping cart abandonment rates and increase transaction sizes, say Matsumoto and Gehly. In 2003, Yankee Candle deployed a Flash application on its Web site that allows customers to create their own votive candles. According to Gehly (whose company helped design the application), that capability led to a 25 percent increase in the number of items purchased per order and a staggering 1400 percent increase in conversion rates. In addition to using rich Internet applications to improve the online shopping experience, companies are using streaming audio and video, artificial intelligence in the form of avatars and bots, as well as real-time analytics.

Jeffrey Rayport, co-author of Best Face Forward: Why Companies Must Improve Their Service Interfaces With Customers (see "As You Like It", CIO June 2005), says it's in companies' best interests to try out new Web technologies. "If you don't find a way to experiment with these new technologies to find out which will be relevant to your customers, and your competitors get it right, you'll have a lot of catching up to do," he says.