Last July, when I was finishing my MBA studies, I started to work with my partner on an idea for a product we called tentatively Rich Product Experience. We have written elevator pitch, built a little mockup of the product, talked with some people from the Technion about it’s potential and….well that’s about it. Unfortunately we didn’t move much pass the initial plans and some very preliminary demos. Admittedly, I was more enthusiastic about it than my partner, but I guess I didn’t have enough enthusiasm for the both of us.
In this post I would like to share the elevator pitch we have written. Maybe in the future I would share more details about this endeavor.
While overall retail sales shrink in face of economic hardships, online retail sales continue to grow with more than $10.87 billion in sales in U.S., in January 2009 alone. But while Amazon, eBay, and price-comparison engines gain market share, individual online retailers are left to fight over prices, while their margins dwindle and their offering is commoditized. In climate of today, in which most e-retailers cannot permit themselves high spending on marketing, they look for cheap solutions which will allow them to differentiate themselves, offer great customer experience, increase conversion rates and drive sales.
Rich Product Experience is a rich-media widget (built on flash/silverlight) that presents product information in visually compelling, and interactive way. Through usage of high-resolution photos, zoom capabilities, slideshows and animations, it immerses the consumer in rich shopping experience. In addition, it integrates various online sources, and offers consumers brief but conclusive summary of product qualities, professional reviews, rankings and user-generated content. This will allow consumers to decide upon product purchasing, without leaving retailer’s site. Our goal for Rich Product Experience is to serve as consumer’s last stop before purchasing.
Picture 1: Retailer’s generic product page
Pictures 2,3: Retailer’s product page with embedded Rich Product Experience
Integrating Rich Product Experience on retailer’s site is risk-free, since it can be tested on small number of products, and its contribution to increased conversion rates can be easily evaluated.
Small to medium size online retailers in the global market, that can’t allow themselves to spend a fortune on marketing, or on site development, but want to offer their customers rich experience, that would lead to increased sales.
U.S. online retail market size for 2008 was about $120 billion (excluding auctions, travel, cars). 30% of sales came from sites generating less than $10 million in sales. This makes the intended market size to be $40 billion.
Price-comparison engines drive visitors to retailer’s site, and Rich Product Experience converts them to buyers. Our solution will significantly improve customer experience on retailer’s site, and subsequently increase conversion rates, without requiring any time or money investment on retailer’s part.
Each product widget will contain a “buy me” link. The retailer will pay us a small flat rate per each click on it. The advantage of this approach is that the retailer pays only for clicks that generate actual sales, as opposed to payments to price-comparison engines, which charge for visits to retailer’s site, but not necessarily orders.
Advantages over existing solutions
Existing solutions include generic shopping carts, which allow retailers only site-level branding, and poor shopping experience with static product information only. They lack professional reviews, rankings, and user-generated content. Rich Product Experience, on the other hand, provides rich, visually compelling, product-level content, together with reviews and social capabilities.
Another alternative available to retailers, is building customized, branded store, which will offer rich shopping experience, and some social capabilities. This approach is very costly, and is not suitable for small online retailers. In addition, since it is developed for only one retailer, as opposed to product widget that is embedded on numerous sites, its user-generated content will be very limited.
- Proof of concept – our underlying assumption is that conversation rates can be improved by providing better shopping experience on product pages. This can be proved only by building a prototype, and testing it on real online ecommerce site.
- Imitation – our solution can be imitated and reproduced, since it is not based on technology that can be easily patented and protected.
- Sufficient growth rate – in case of successful proof of concept, it would be essential to be able to expand quickly the gallery of available products, in order to conquer significant market share, before the imitators will do so.