The Supply Side: Retailers continue to struggle with efficient online search

With more retail sales gravitating online in the past two years, many retailers remain woefully behind the curve, according to a new report from Coleman Parkes Research on behalf of technology firm Algolia.

By surveying 900 retail executives with well-established e-commerce platforms, the report found that more than half of the retailer respondents were stuck in 2010 regarding digital search capabilities. When the pandemic hit in 2020, and the surge for online orders began, 65% of retailers were unable to meet demand, the report states. And 40% said they were still unprepared to meet a significant surge in consumer demand two years into the pandemic.

“The retail industry and digital commerce have evolved rapidly since the COVID-19 outbreak — more so than any other time over the previous decade. Yet, online conversion rates have remained relatively flat,” the report states.

Walmart, Target and H-E-B executives have said that during 2020 and early 2021, digital commerce saw 10 years of growth, a pace no one could have anticipated or adequately prepared. Retailers responded by pouring millions of dollars into improving or expanding digital capacities. The report found that 46% of digital commerce retailers said they had under-invested in search capabilities as much of the investment went into fulfillment, labor, curbside pickup and delivery services.

Digital search technologies have evolved during the past decade and what was once seen as futuristic are now easily accessible to retailers of all sizes. Algolia reports that just one in eight retailers embrace current search to gain a competitive edge. The report said that the other 87% of respondents who possess basic or intermediate search capabilities also experience a higher level of empty carts and non-sale conversions.

Algolia said a basic search is used by 33% of the retail respondents. That is used solely as a transaction for users to find exactly what they are looking for. The user interface is a search box or search bar only. The report found that more than half (54%) of the respondents are using intermediate search capacities, enabling shoppers to find what they are looking for and discover items via browsing navigation and advanced capabilities. Just 13% used advanced search to predict shoppers’ needs with personalization and recommendations. The group can then buy merchandise using analytics while interfacing with voice search or visual search.

Half of the retailers (53%) said their search optimization provides relevant results even if the users make spelling errors or use plurals of synonyms. The report also found that 44% of retailers provide users with “as-you-type” capabilities to update the search results with every keystroke. Also, 42% said their systems allowed users to search all content sources such as product catalogs, blogs, e-commerce-only inventory, and store inventory.

The report found that 38% of retailers used personalization to promote higher-margin products or most popular items. Again, 36% said their search involved personalized results based on user preference and behavior. Just 26% said they were leveraging artificial intelligence from user behaviors and automatically suggesting suitable options.

Jon Allen, founder and CEO of Rogers-based Woodridge Group, said using advanced search and personalization is worth the added investment for brands selling online.

“We’ve seen increases in product page traffic of more than 300% by optimizing search and addressing shopper’s most asked questions pulled from product sentiment reports. Today’s shopping trip typically begins online. Improving the shopping experience at that very first step can lead to more visitor traffic, higher conversion rates, and a better brand reputation,” Allen said.

He said personalized search results are more accurate and relevant to the particular shopper, saving them time in the search process. Allen said good search relevancy and accuracy increase the speed and enhance the shopper experience, which drives revenue for brands and retailers.

“Personalization is about truly understanding your customer and their needs. We do that by using analytics to understand shopper sentiment, so we are better equipped to speak to their questions and concerns about a product before they even ask. Personalization is a feature that helps bridge the gap between what customers expect and what brands and retailers deliver,” Allen said.

Eric Howerton, founder and chief growth officer at SKU Ninja-WhyteSpyder in Rogers, has preached the power and importance of search for nearly a decade. He said search in itself continues to evolve, and it’s constantly getting better for the end shopper.

“The easier a shopper can find what they are looking for in the first query, the more likely they are to become a loyal customer,” he said.

Howerton said optimized search would become a much bigger deal, and brands and retailers need to step up their investment or risk getting left behind. He said Amazon has a considerable head start. Still, Walmart continues to invest and even requires suppliers to provide richer, more accurate and enhanced item content that will help improve product searches.

“Brands have all the rich details of the products they manufacture, and it’s up to them to share the content with their retail partners to better enrich the search results. It all gets down to content. The robots need to be fed rich information to be able to generate the most relevant search results for shoppers,” Howerton said.

He said supplier brands must do more heavy lifting and ongoing product catalog audits to ensure all the attributes of an item are in the item setup and product page.

“In 2015, it was enough to have 10 spreadsheet columns of info on each product. Now suppliers need about 100 columns if they are going to become further advanced and relevant in shopper search queries,” Howerton said.

He said the time has never been better for brands to optimize product content. He said retail partners would welcome the action because they know how vital better search is for long-term sales growth.

“Walmart is ahead of its suppliers in terms of the work done to enhance online search, and it will be important for brands to help bridge the gap. It’s going to take retailers and suppliers working together to enhance search as more sales are moving online for all categories,” Howerton said.

According to Forrester Research, 43% of shoppers on retail websites go directly to the search bar. That makes the search bar a prime spot for retailers to execute merchandising strategy, promote the latest offers or optimize for selling products with higher margins. Forrester said just 38% of retailers can merchandise and optimize outcomes using search.

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.