To adequately answer this conundrum, there are a series of questions that must be answered. When addressing these questions, it's important to be honest with yourself.

On performance...
Is your site delivering pages in sub one second download times and will it scale to meet seasonal peaks in traffic (99.95% uptime)? Does your conversion rate beat the industry average of 3% or can you improve your order size by adding deeper merchandising functionality? Are you having high shopping cart abandonment rates of over 60%? Are you getting a steady level of site traffic from your SEO or is your current platform limiting your customer's ability to find your Web store?

On cost...
What are all the costs associated with running the site? Are your site maintenance processes efficient or do you need a large staff in order to make frequent changes to your Web store? What are your hardware and software upgrade costs and can they be reduced?

On growth strategies...
Have you thought about the strategic nature of your site? Is the current platform limiting your ability to sell internationally? Can you leverage the existing platform to roll out new Web stores quickly? Is there a deeper multi-channel strategy that will make my customer relationships more profitable? Is your site secure? If not, what does it mean to your business if you have a security breach? Does the Website meet the standards set by your competition?

In the age of sizzle it may be fashionable to make incremental improvements to your ecommerce site that simply look good, but eventually, that lipstick will wear off, once again revealing the limitations that have always been there and holding you back. Just remember that you can't sell if the site is down or your new graphical pages take 20 seconds to load and if this is the case, it may need more than a light makeover.

If you decide that a new platform is required, consider your overall business strategy and then decide how ecommerce plays a vital role in the big picture. Take a deep look into the ROI that can be generated with a new site including improved sales, faster time to market, and lower total cost of ownership. Lastly, build a timetable to sell the replatforming project internally, select a platform vendor that has the functionality you need and the expertise to help you grow, and set reasonable targets for launching your new sites.

I've recently written a white paper and a couple of articles (The Ultimate Online Shopping Experience, Part 1: Strategy & Design and Part 2: Features & Functionality) that explore the essentials of designing superior online shopping experiences—the key things that online retailers should and should not do. Have a look at these more detailed articles, but here's also a brief summary:

First, while crafting the customer experience strategy (i.e., deciding what to change), keep in mind the following important steps:

• Articulate your top brand, business and customer experience goals
• Define the customer experience around personas
• Review the shopping experience end to end
• Build the strategy using multiple perspectives
• Keep things simple
• Test your assumptions by observing real customers
• Consider analytics and tracking requirements as part of the design process

Of course, at this time of year most companies don't have time for a detailed site redesign. But even a high-level review of key aspects of the online shopping experience can help identify some easy-to-implement changes that could result in that crucial extra 25 to 50 basis points in conversion. Do some test shops on your site (or better yet, ask a ‘fresh set of eyes' to do this), paying attention to the following:

• Will a customer feel safe shopping on this site?
• Is there anything important "below the fold"?
• How else can we save the customer time and effort?
• Are all the tasks or workflow processes on our site clearly explained and easy to follow?
• Do we offer multiple ways of viewing or sorting information on the site to suit a given customer's personal preferences?
• Are product recommendations presented in a way that motivates browse and purchase?
• Does the site provide explicit feedback in response to customer actions?
• Is the checkout process as efficient and easy-to-use as possible?
• Does the site provide clear, detailed and context-relevant "help" wherever needed?
• Are the toll-free number and/or live chat options prominently displayed throughout the site?

In today's market environment, it's more critical than ever to maximize the return on all the hard work and money spent driving traffic to the site. You must ensure that the online shopping experience on your site is easy, enjoyable and efficient.

For more on delivering superior online shopping experiences, download the "Designing Superior Online Shopping Experiences" best practices guide authored by Julian Chu. 

No, not really, the holidays are still on as scheduled, but with all the doom and gloom reports about the economy; I am starting to think the Grinch may be running The Fed. Yet even with all this noise, retailers are reacting quickly to the economy and the ones who manage to go on offense early will be the most likely to succeed.

Believe it or not the holiday shopping season already began. While many retailers may not label it quite yet as holiday shopping, retailers are making a big push early with major discounts....take a look at an email I got last week from Jos A. Bank.

And rest assured this is not the only email I got today about upcoming sales.

It is not even just an online only phenomenon, even in-store retailers are trying to move customers into the holiday shopping mode quickly. For instance, being the last minute shopper I am, I went to Target one night last week to find a Halloween costume, only to find employees taking down most of the Halloween section and in its place a holiday wonderland appeared. This was 4 full days before Halloween, and I know I am not the only last minute shopper out there!

That said, retailers need to be aggressive this year, and those caught behind the curve may struggle.

Online retailers in particular, need to be able to adjust quickly and need to be in full control of their site. In a tough economy the opportunity cost of waiting a day for a simple change is too high. Merchandisers, marketers, and web developers need to be on their toes not only to react to competitors but more importantly to strike first with great content, product information, and most importantly promotions.

Three of our clients made the headlines this week and I wanted to pass along a brief digest as well as congratulate Jones Apparel Group, Gardener's Supply Company and Compact Appliance on their achievements.

Nine West and Gardener's Supply Company made Internet Retailer's 2009 Hot 100 Retail Websites list. The Nine West site launched on the Demandware eCommerce Platform back in September, one of several Jones Apparel Group sites now running on Demandware. The site includes video commentary from Nine West creative director Fred Allard, Look Book, which guides you through the purchase of a complete outfit, As Seen In, which helps you find the latest styles you may have seen in a magazine, Behind the Scenes videos, and much more.

Gardener's Supply has been running on Demandware for almost three years now and we continue to be impressed at the creativity and innovation that goes into this site. Along with its sister site, Dutch Gardens, they continually lead the pack with sophisticated features such as community building, contextual selling and guided navigation.  

No wonder both Nine West and Gardener's Supply Company made the Hot 100 List.

Compact Appliance was featured in Internet Retailer with an article about how it is able to launch microsites quickly, using just one standard catalog. Compact Appliance now runs 4 sites on Demandware, including the most recent Kegerator.com, the destination site for beer enthusiasts. Compact Appliance expects to finish out the year with web sales up by 25% or higher.

If there's any upside to a commute it's that it provides at least some opportunity for idle thinking. So on the way home last night, breezing North on 93 and beat down by Red Sox doom-and-gloom sports talk, I snapped off the radio and started to idle the old squash. Free form association kicked in and when I blew through the yield sign (nearly T-boning a lime-green hybrid in the process), I thought, "Wow! Now that's a much better model for ecommerce!" Ok, so maybe I should back up and explain that a bit.

Over years of depicting the costs and effort allocation of a typical ecommerce operation, I had evolved into using a tried-and-true pyramid diagram. You know the one. At the bottom was the hardware and infrastructure. It was wide and thick, signifying gobs of energy and cost. Stacked on it were databases, app servers, IT professional support, point applications and other such things-each showing diminishing time and effort. Finally, perched at the very top, with the smallest land mass, was merchandising, marketing and site experience. It always seemed wrong that such important activities would get such a relatively small piece of the pie, but hey that's how things had to be. In fact, analysts point out that up to 80 percent of ecommerce resources (dollars, time and people) are spent simply maintaining the existing infrastructure and processes.

So wrong.

Effectively this means that 80% of an ecommerce operation is going to activities that yield absolutely NO competitive differentiation. For instance, when was the last time a customer went to a site and said, "Kudos. It's up!" or "Hooray! It has secure checkout!"? Likely never and yet that's exactly the type of activities that are getting the most resources.

And that's where the upside down pyramid comes in.

Wouldn't it make more sense if the basic table-stakes portions of the ecommerce operation took up the minority of effort? All the behind-the-scenes work that goes into a professional operation-security, compliance, hardware and database performance, application upgrades etc.-was just there? And instead, retailers could spend more time in the areas that will really drive top line growth. Price management, promotions management, presentation of the assortment, UI innovation... You know the list. This is the stuff that consumers really care about.

So I challenge you commuters out there to make your mindless travel time more productive. Ponder the tough questions and voice your opinions. While no one has the answer, everyone has an opinion-and stringing together enough of these thoughts and opinions can lead to a breakthrough big enough to change the game. Heck, it worked for the Sox, why not us?

What would revenue look like for most operations if these were the areas that received not 20% of the effort, but 80%?

Are there really people out there who would prefer to spend their time worrying about site uptime and secure checkouts rather than marketing, merchandising and selling their products?

What steps are you taking to turn the ecommerce status quo on its head?

For most transaction-based websites, the product catalog resides in the ecommerce platform. The catalog is the center of all online merchandising since cross-sells, pricing and promotions are usually tied to the products contained within. In order for merchandisers to optimize product search results, search capabilities need to be tightly integrated with the catalog for making real-time adjustments. This includes the ability to react in real-time to low inventory levels, high sales velocity and competitive pressure for improving customer satisfaction, driving sales and beating the competition.

An example of ecommerce platform driven search merchandising is delivering relevant cross-sells in search results for driving incremental sales. A second scenario is connecting inventory levels with search relevancy ranking to help an online retailer automatically demote low stock items in search results and promote high inventory products at the top of the sort order.

Many ecommerce platforms today offer cutting edge search functionality tied with relevancy ranking rules for automating the product presentation process as a standard feature. Over the past 4 years, platform vendors have made huge strides in improving search by adding guided navigation, natural language search and various other methods for helping customers quickly, easily and accurately find products. Some of these ecommerce platforms have tied this functionality directly to the product catalog for ease of use, full control and better merchandising results.

So the question must be asked: Is searchandising something new and useful, or is it marketing hype created by search vendors?

Customers have come to expect free shipping, especially for orders of significant value (over $100). It's used by almost all sites in one way or another, and, if you're like many retailers, you'd like to stop this practice all together. Free shipping decreases margins and, in many cases, it can't be used along with other, potentially more attractive promotions. If free shipping is given to customers as a site wide promotion, you risk your customer double-dipping into your margins if other promotions are applied to an order.

In many cases, the main problem with free shipping is the way it's implemented and offered. If you ship a $50 order for free, it may cost your company as much as $10 to ship, and that may turn your $50 order from a low-margin but profitable sale to a loss. Allow other promotions to be tacked on, and your sale is suddenly running you deep into the red.

Customers don't necessarily see the actual value that free shipping has since shipping costs don't come into the equation until checkout. This means that a consumer won't actually see the value of free shipping until they've already decided to buy. For example, a plasma television may sell for $1000, and free shipping can cost the retailer up to $200–suddenly you're giving a 20% discount without giving the customer a sense of the real value of this promotion. At that point in the transaction, discounting is a wasted effort unless the retailer is experiencing high shopping cart abandonment (rates of over 45%). To inspire conversion, free shipping must be offered earlier in the sales process, well before a customer makes a purchasing decision and well before they hit the checkout button.

So where is offering free shipping effective? According to a recent survey of customers by Paypal and comScore, the number one reason for abandoned shopping carts is unexpectedly high shipping fees. So, it stands to reason that offering free shipping will hook those customers who abandon their carts once shipping is tacked on to their final purchase price.

But it's not that simple–after all, loyal customers will quickly identify this process and abandon carts regularly to get free shipping. A retailer can also limit free shipping to orders with no other promotions applied to the purchase, thus avoiding double-dipping into their margins. Randomizing the free shipping offer to recipients based on previous buying behavior will also help mitigate exploitation of this promotion.

In short, you need to make free shipping part of a larger promotion strategy where you segment your customers based on value. Test the price sensitivity of your customer base and experiment with new promotion types in different stages of the selling cycle. This old promotion still can convert customers if you consider the unique way you do business, and rethink the way you leverage free shipping to maximize its efficiency.

In this post we'll discuss some of the key findings of this study:

"Mobile Emerges as a Growth Channel for Retail"
This was in fact the title of the report. Cisco asserts that retailers need to proactively address the growing usage of mobile devices for shopping, especially by younger consumers. The study found that 42% of surveyed retailers provide product content through mobile-specific sites/pages, 15% enable customers to buy products via mobile devices, and another 10% are using SMS to answer shopper questions.

It should be noted that the survey scope was comprised of 45 major retailers, mostly large store chains. So the numbers above certainly do not apply to the market as a whole. But the idea of giving in-store shoppers the ability to get instant customer service via SMS is a great one; this approach could cost-effectively address the growing problem of not being able to find anyone to help you in these "big-box" retailers! For most of the rest of the market, the need for mobile-specific investment is probably at least 1-2 years off - let the well-funded giants figure out what works and doesn't work and leverage their experience accordingly.

"Social Networking and Interactive Technologies Becoming Must-haves"
The study notes that social networking has become mainstream. I would certainly agree - a recent survey of my 15th college reunion class showed that 55% of us are using sites like Facebook, MySpace and LinkedIn - and we're not exactly young anymore! Key stats among surveyed retailers:

• 52% are providing for customer product reviews.
  
• 17% of surveyed retailers have customer community features.
  
• 50% have advanced visualization tools and videos on their sites.

There's nothing customers value more than peer feedback. Customer-generated product ratings and reviews are becoming almost tablestakes, and it's a rare retailer that wouldn't benefit by adding this to their sites. Community features are moving from being more-or-less distinct areas of the site to becoming tightly integrated with the main shopping experience -Wet Seal's new Fashion Community is a good example of what's possible today. As people have gotten more experienced building interactive features on AJAX and Flash/Flex, there's been an explosion of innovation in this area. In short, while we're still in the early stages of the "Web 2.0" era, things are moving very fast, and you'd best keep a close eye on the competition.

Retailers must keep innovating to stay competitive
The survey notes that all of the retailers classified as "leaders" have introduced "at least five new and highly relevant capabilities in the last 12 months." As discussed in a separate article on the study, "The best strategy is to carry out a continual roll out of upgrades," says Lindsay Parker, director of Internet Business Solutions Group (IBSG) retail at Cisco. "Don't wait for a major event to innovate," Parker says. "You must first create a roadmap and then build underlying technology that enables you to add new functions. Then you need to continually roll these out to be innovative and fun, which will fully engage your customers."

In case you were wondering, the top 10 ranked retailers from the study were Amazon.com, Best Buy, Circuit City, Quelle, Otto, Macy's, FNAC and Bol.com.

The key word here is "relevant" - simply introducing lots of whiz-bang technologies may not get you anywhere unless it truly enhances the customer shopping experience. And the missing word is "profitable" - innovations are worthless if they don't drive customer loyalty, incremental sales and ultimately ROI. Furthermore, don't lose sight of core merchandising basics - the most innovative web site in the world won't do you any good if the core business is suffering (viz Circuit City).

That said, the general point is spot on. Online retailers need to have an ecommerce platform that enables them to easily and quickly roll out new, differentiating capabilities on their sites. They need robust business user tools that allow them to rapidly make changes to site content, without involving or waiting for the IT department. And they need an ecommerce partner that helps them stay on the innovation curve by continuously delivering new functionality without the need for expensive, time-consuming software upgrades. If you don't currently have these capabilities, maybe it's time to start looking for a new platform!

SEO is a hot topic these days. As the PPC channel gets more competitive and costs increase, more online retailers are focusing on SEO as a means of driving traffic to their sites. By increasing their rankings for high-value keywords, merchants can build a foundation for attracting new customers over time without having to pay for every click-through. What’s more, the investments that drive improved natural search traffic are usually good steps to take to improve the customer shopping experience in general.

But online merchants have plenty to worry about already, and it’s important to spend your time wisely.  So first, we’d like to share our “top 10” list of the most essential SEO tasks. If you do nothing else, periodically assess your site in the following areas and address any major gaps.

SEO “Must Do’s”

Robust SEO functionality within the ecommerce platform can help retailers perform many of the above tasks efficiently, so their teams can focus on other valued-adding activities. For example, Demandware offers the following capabilities in this regard:

True SEO excellence requires dedicated focus on competitive analysis, optimizing site content, and building external linking relationships. Thus, it’s important to choose an ecommerce platform that takes care of the SEO basics, so your team can devote their attention to things that will really differentiate your site and improve business results.