by Vinod Kumar, Demandware Retail Practice

These are exciting times in the world of web analytics. Last week, IBM announced the acquisition of Coremetrics.  With Omniture being acquired by Adobe and ATG rumored to be eyeing Webtrends, I wanted to take a step back and see what this could mean for online retailers.

Some argue that these acquisitions will stifle innovation in the analytics arena. Others argue that this will result in tighter integration at the platform level, thereby resulting in greater cost savings for Retail IT.

As a Solution Strategist with the Retail Practice team at Demandware, I’ve had the opportunity to observe and work with retailers of various sizes on their analytics initiatives. I’ve noticed that even though most leading vendors offer significant analytical and visualization capabilities, they leave much to be desired in terms of modeling and future trending functionalities (i.e. predictive analysis). IBM’s acquisition of Coremetrics may now position the platform to go beyond hindsight analysis to forecasting and future trending. I say this for two reasons:

1) IBM’s current portfolio includes strong analytics plays like SPSS that bring predictive analytics capabilities to the table.

2) IBM and Coremetrics had already partnered to provide special versions of the analytic tools as part of WebSphere Commerce, thus demonstrating Coremetrics’ ability to play nice with IBM technology.

However, history shows us that acquired companies find it very difficult to innovate. Their attention and effort gets redirected towards integration with the acquiring company rather than innovating within their product lines. As the newly acquired fleet tries to integrate with the Mothership, product innovation generally tends to take a back seat. So, it may take a while for such plans to see the light of day.

Meanwhile, Google continues to release new features and advance the capabilities of its free analytics tool. Yahoo! provides free analytics as well, but it has a long way to go before it can even think about catching up with Google. In my experience, I’ve seen retailers use Google Analytics in conjunction with a paid tool. With base analytics increasingly becoming free, paid analytics vendors will face pressure to deliver more functionality to justify their price tag. This means lower prices and additional leverage for customers when renewing contracts. Retailers may also start expecting to see a good amount of freebies offered along the lines of tighter platform integration and/or free “fringe” functionality like real-time analytics.

Let’s not forget that with the two big industry leaders acquired and one waiting in the wings to be gobbled up (speculated, of course), it creates a gap for bright young start-ups to take their places. Expect to see a lot more start-up activity this year, especially in the fields of social and mobile analytics. These are exciting times indeed.

By Adam Forrest, Demandware Product Marketing 

Product finders, gift finders and configurators have proven to be very successful—resulting in conversion rates of 20-30% for those who engage. So why doesn't every site have one? The trouble is the time, effort and money that goes into creating the finders—that for the most part are hard coded flash object that don't account for out of stock products or seasonal turnover. You are left with an empty shell that you need to pump more time, effort and money into. That is why we were pumped to see the new completely dynamic and data driven Board Finder on the recently relaunched www.burton.com, built by the folks at Burton!

Using their internal flash skills combined with Demandware out of the box features (i.e. search refinements, price scrollers, customizable attributes) and their intimate knowledge of what makes a board good for certain people, Burton has launched an unbelievable Board Finder. Check it out and get that special someone a new board for the holidays so they can shred it when the powder returns this winter.

For those of you short on time, below are some screen shots of the finder. But if you have an extra moment, check out the real thing.

Demandware client innovations—designed, built and launched all on their own. Now that is what Demandware is all about.

By Julian Chu, Demandware Client Success

Cisco recently issued the 3rd installment in its annual survey of online retailers' ecommerce capabilities. The survey scope was expanded this year to include both North American and European retailers.

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!