Faster Web connections permit retailers to add editorial features that can make their sites 'stickier.'
The New York Times
August 9, 2004
By Bob Tedeschi
IF it is taking longer to shop online, there is a reason: stickiness, the notion of gluing customers to sites with product information like consumer reviews and stories, is back.Stickiness was heralded during the dot-com boom, and ridiculed during the bust. But now a confluence of technological and consumer trends is prompting e-commerce executives to again think of their online stores as multimedia shopping extravaganzas.
The trend could be seen as yet another byproduct of high-speed Internet access, which is affording online users the luxury of clicking onto pages they might have avoided in their slow-motion surfing days. And like most Internet business trends, this one is being played out against a backdrop of fiscal restraint not always seen in the smoke-andmirrors Internet economy.
Take Vegas.com, which sells airline tickets, hotel rooms and other travel products to Las Vegas visitors. The site's president, Howard Lefkowitz, who took the job in 2001, was reviewing employee expense reports when he happened upon an invoice for $3,000 - half for alcohol expenses, half for cash outlays. The employee, it turns out, was the site's strip club reviewer. "I said, 'We pay a guy, and we liquor him up and line his pockets with 20's to review strip clubs?' " Mr. Lefkowitz recalls telling a manager. "Not anymore we don't."
His objections were financial, not moral. Vegas.com still offers strip club reviews, but Mr. Lefkowitz said he arranges free entry for his new reviewer, Dan Hippler, whose job duties also include data analysis. "He brings a bottle of water to the clubs, and if he does use 20's, they're his own," Mr. Lefkowitz said. "But that's information I frankly don't want to know."
Mr. Lefkowitz said the Web site's editorial team had tripled, to 10 to 12 people, as the site built more informational features around its travel products. This fall, Mr. Lefkowitz said, the company intends to introduce, in partnership with Nextel Communications, a feature called the Nextel Business Center, an online concierge service of sorts, that will give travelers lists of activities near Las Vegas hotels. He said the site had in the past year created editorial sections devoted to bachelors, couples, families and others groups. "And we'll continue to expand," he said. "But there's a fine line. If people are reading too much, they're not buying stuff."
Vegas.com has walked that line well, Mr. Lefkowitz said, by ensuring that most of the editorial features are relevant to a transaction. He would not disclose the site's sales, but he said that since 2001, the number of visitors who purchased a product had increased thirtyfold.
"That's not just because of our content," Mr. Lefkowitz said. "But it's a piece." It is not surprising that travel sites would be at the vanguard of the stickiness revival, given that travel tales focusing on a certain destination are critical to inspiring travelers. And since travel sites also occupy by far the most lucrative niche of the e-commerce realm, the biggest sites can afford to invest in features that smaller e-tailers cannot.
InterActiveCorp's Expedia, for example, recently introduced a redesigned Web site with more editorial features, like virtual tours, which offer visitors panoramic views of hotel rooms, beaches and such. Users can direct the view aspect with the mouse.
"We've always seen content as very important, but recently we've taken it to the next level," said Stuart MacDonald, a senior vice president at Expedia. "For a lot of people, the trip almost starts when they start to plan. To the extent we can make that easier and more fun, it's good for business."
Mr. MacDonald would not disclose specifics about the cost or benefits of the company's editorial expansion. "It's a significant investment but the reason we do it is that we get the return," he said. As for why Expedia and others have chosen to expand their editorial offerings now, Mr. MacDonald said, "Broadband is absolutely a part of it." Broadband, meaning a high-speed Internet connection, he said, encourages more Web browsing. "But people's expectations have also increased."
Indeed, as more media sites experiment with video clips, customers could be looking for the same from commerce sites. That is partly why Expedia recently began testing a feature that allows users to view live video from SeaWorld. "This is a first step for us," Mr. MacDonald said. "We'll see what the future holds."
Editorial content is one leg of the so-called three C's theory of Internet business success that pervaded the dot-com boom. Alongside content and commerce, sites were also encouraged to add "community" features, for users who liked to interact with other consumers via chat rooms, message boards or customer reviews.
Elaine Rubin, chairwoman of the e-tailing trade group Shop.org and a senior vice president at 1-800-Flowers.com, said: "Over the last six to nine months, I've seen a resurgence of interest in how to do community. Not message boards or chat rooms, but new ways to get consumers helping others." Apple Computer, on its iTunes music site, offers consumers a way to offer their music mixes publicly, for example, while eBags puts gold medal icons next to items that receive the highest customer ratings.
Ms. Rubin said the interest was still somewhat isolated to "more mature online companies that have established themselves, and are now looking more toward how to differentiate themselves." "And," she added, "the idea with community is that people who post things to the site will come back more frequently because they're more engaged. They've left a piece of themselves behind." More companies are following Amazon's longstanding user-review feature, Ms. Rubin said. She cited iTunes, Backcountry.com and eBags among other online sellers who have honed their user-feedback features in recent months.
1-800-Flowers.com has also introduced community elements to its site, by introducing a section of the Web site this spring called "Expressions Exchange," which allows users to browse through a library of phrases and sentences to place on gift cards. The messages are posted not by staff writers, but by site visitors, who also rate the quality of the writing on a scale of 1 to 5.
Ms. Rubin said it was too early to judge the feature's success, but she said 50,000 customers each month, about 10 percent of purchasers, reach the end of a purchase and click on a link for help composing a gift message. "So it's another dimension of how we can build value for customers," she said. And although her company's investment has not been small, Ms. Rubin said it was considerably smaller than it would have been in the 1990's, when technologies for managing a Web site's content cost $500,000 to $1 million to set up, compared to $20,000 today.
But just because companies can offer such features, does not mean all of them should, said Patti Freeman Evans, an analyst with Jupiter Research, an online consulting firm. "We're having a lot of the conversations we had in early 2000, where everyone's thinking of all the wonderful things we could do," she said. But Ms. Freeman said that according to a recent Jupiter survey of Internet shoppers, only about 20 percent of socalled intense shoppers considered customer-generated reviews valuable. Fewer than 10 percent of more casual shoppers regarded such reviews as valuable.
"I'd thought it'd be higher," Ms. Freeman Evans said. "So if I were thinking about community-type features, I'd spend my money on fabulous product search and a couple of extra pictures, before anything else."