The Supply Side: In retail sales, technology can’t do it all

At a time when tech investments among retailers like Wal-Mart Stores and Amazon are in the billions, suppliers should remember that technology can’t do it all with respect to selling products online, said Eric Howerton, CEO of Fayetteville-based WhyteSpyder Inc.

“Winning in e-commerce will require humans. Bots won’t do it,” Howerton said during a recent supplier workshop taught in conjunction with the retail and supplier training program at NorthWest Arkansas Community College. “It’s humans that create the information and item content that technology then delivers. You can only use the technology once you have the information.”

Howerton said retailers like Wal-Mart that have tried using bots for content management found it doesn’t work. While content creation performed by artificial intelligence powered by robot writers might look promising, Howerton said, the right applications are not yet available. Taking optimized content and turning it over to the robots to manage was disastrous in a test with Wal-Mart. He said the robot destroyed the value of the searchable content that had been working previously.

“[Artificial intelligence] leverages social media content and other aggregate information. But, there needs to be humans behind it,” Howerton said. “You can’t rely on robots to have insights about what customers want because that is always changing. Creative content that’s unique and searchable can’t be automated or it would have already been done.”

Howerton said suppliers and retailers try technology to manage their content, and it fails every time. Howerton said if a product or site has less than 1,000 relevant searches a month, Google won’t index them. He said content is intangible, and it’s been hard to define what good content is, even for Wal-Mart. However, he said, content starts with the manufacturer.

“Today most suppliers and manufacturers are not optimizing their online content. Wal-Mart gives suppliers amazing real estate on the item pages for up to 40 videos per item, but it’s rarely being used,” he said. “Shoppers today have zero patience if they can’t find the information they are looking for on your page, moving to the next aisle is as simple as clicking the next page, or jumping to another site altogether.”

Howerton stressed granular item details are necessary online whether suppliers have one item or 40,000 in their catalog. Shoppers will find what they want. Suppliers can’t control that, and it’s time suppliers feed the hungry shoppers, he said. Over the next 10 years, he said there’s much grunt work needed from manufacturers to generate a rich media catalog for the items they intend to sell online.

“Shoppers have always wanted information, they have never wanted advertising,” Howerton explained. “We have all subscribed to magazines, and I don’t pay $15 a year to get Men’s Health to read the ads. … It’s human nature to want information. Dating back to 530 B.C., people were wanting to get information from one community to another and the running man was the answer. Then came the telegraph and newspapers, telephone and computers connected across the internet. And with each cycle, the consumers wanted faster, relevant and more accurate information than they have previously had.”

He said Google, perhaps the biggest robot today, hates robot curated content and routinely busts the sites that use it.

“We have the world’s best robot in Google, trying to get more human,” Howerton said. “It takes artistic and scientific content that comes together to tell a unique story for every single item sold online. There are no shortcuts to original and unique content generation. If there were, we would be using them at WhyteSpyder.”

Howerton said ahead of a recent camping trip, he searched Google for a cooler. He said the corporate site popped up first in the search, and Amazon had specific bullet points on the cooler he was hunting. But nowhere on the first page did the product show up at Wal-Mart. Out of forced behavior, Howerton said, he looked at Wal-Mart’s site and found the item with just one photo and an anemic product description. He ordered from Wal-Mart and picked up in a store because he didn’t have two days to wait for an Amazon Prime delivery.

Too often shoppers don’t think to browse Wal-Mart’s online inventory, particularly if it doesn’t populate on the first page of an item search in Google. Combine that with the fact Amazon has been seen as the default search engine ahead of Google by a large segment of the online shopping universe, and it’s easy to see how Wal-Mart suppliers could be losing sales in some categories.

Howerton said Google rewards those who have original, unique content over those who don’t, and the search engine doesn’t care who wins the race. Just 5% of consumers who go online buy a product, but 81% of them will research a product online before they buy it, he said. About 14% of consumers search coupons online, 16% compare prices, 21% read user reviews and 42% research information about the product.

He said without relevant, accurate and optimized content, Google will not know if a supplier has something to sell. He said Amazon follows Google’s patterns and the content on Amazon is more likely to pull up than other retailers.

“Wal-Mart still has some work to do,” Howerton said. “Google is hungry to get some good Wal-Mart content and that has to come from the suppliers.”

Howerton told supplier manufactures not to waste time trying to build their own e-commerce sites because Google has recognized Amazon’s market share, and knows it has to give users the best results based on their search. To help grow business at Wal-Mart and grow those sales, he said they must get on this faster than online representatives for Amazon.

The first three search results outside of sponsored links on Google result in 70% of the organic clicks. He said that’s where suppliers have to be to convert clicks to sales.

“The honey hole is where you have relevant information shoppers are searching for to solve their problem,” he said. “Suppliers need to get on it and get moving if they intend to win. Private label is poised to take dominant share from brands if they don’t take a serious look at optimizing their product catalog with rich media using the tools Wal-Mart has made available.”
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Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.