Takeaways from MITX's "What's Next For E-Commerce" Panel, January 28th, 2010

E-Commerce continues to be a success story through challenging times. While traditional brick-and-mortar sales fell flat last year, online retailing grew 4% during the 2009 holiday season. There’s a tremendous opportunity for retailers to drive business online, even as competition heats up: Internet Retailer reports that the Top 100 retailers account for 55.3 of web sales.

How do internet retailers gain competitive advantage in 2010?

Yesterday I attended the “What’s Next for E-Commerce” panel discussion put together by MITX featured glimpses into where e-commerce companies need to be headed to be successful in the coming months, delivered by some of New England’s most successful online retail pioneers:

• Tom Beecher, President and CEO of Mall Networks
• Scott Savitz, CEO and Co-Founder, Shoebuy
• Niraj Shah, CEO and Co-Founder, CSN Stores
• Brian Eberman, CEO Avenue 100 Media Solutions
• Jeff Bussgang (Moderator), General Partner, Flybridge Capital Partners

Here are some key trends to look out for in 2010:

1. Traffic Acquisition Is Changing
Paid search is finally being replaced as the foundation of site traffic. Savitz: “If you based your traffic on paid search today, it would put your business in a very challenging position.” While growing e-commerce companies continue to focus on building loyalty and repeat business (email continues to be the preferred proxy, and was generally lauded for its great ROI), SEO and new affiliate models are taking over where PPC spends are being seen as no longer cost-effective.

Other ad techniques, incidentally, are also taking hold: re-targeting (relevant ads on third-party sites displayed to visitors who previously were on your site), cross-targeting (your ads displayed when visitors to your site hit a competing site), and ads based on real-time data were all mentioned.

Overall, the panelists kept centering on the language of intent when talking about search. Think about how you can satisfy your visitors’ intent with web content: blog posts, articles and guides, user-generated content, and video.

2. Innovation Is Key
Amazon.com made online shopping comfortable and safe for consumers. When asked if Amazon were friend or foe, the panelists agreed that Amazon did a fantastic job of lowering the perceived risk of buying online. The only problem? They’re really good at what they do. Shah pointed to AZ’s colossal market share.

To compete, e-commerce companies will need to continue to innovate around the user experience. Personalization – segmenting and delivering the right content to the right visitor in real-time was on MITX’s list of recommendations. The panelists also discussed multi-channel retailing, particularly mentioning that mobile delivery and location-based targeting will be big in 2010.

3. Social Media
“Social media is not a broadcast technology,” said Shoebuy.com CEO Savitz. Internet retailers should resist the temptation to use social media channels to pump out marketing message after marketing message, unless it really fits the business model or the way customers want to interact. Social media is a listening tool, one that can be leveraged to drive conversation and build a relationship.

We saw three very data-driven companies agree that customer feedback is critical, and social media is a great complement to best practices such as short and punchy order satisfaction surveys (Savitz reads every single one) and creative practices such as top executives regularly taking up customer service duties.

So, 2010…
These trends follow a common thread: satisfying the demands of potential buyers and customers. Traffic acquisition through SEO, increasing conversion through personalization and mobile-delivery, and social media all satisfy types of customer or buyer need. And they all converge around content.

Imagine:

• Replacing your paid search spend with an abundance of compelling content that drives inbound links, referring visits, and higher search rankings.
• Collecting product reviews from customers on your website, and then including those in a text message offering a discount, directly to a customer’s mobile phone, when he or she is walking near your store (or walks into your competitor’s store).
• Reusing tweets about a specific product on your homepage because you know that a visitor got there by searching for that very product on Google.

These things are all possible. The implications to conversion are pretty amazing. Giving your customers what they need, in every way. 2010 looks to hold some great things in store for internet retail.

What do you think? What are some other ways retailers will innovate in the coming months and quarters?