Ecommerce technology is developing at a lightning-fast pace, stoked by unprecedented consumer demand.

With 60% of phones sold today being smartphones, and more users likely to connect to the internet via mobile devices than desktop PCs within five years, retailers are rushing into m-commerce with alacrity.

In the digital age, shoppers want social engagement online, vastly improved functionality, payment security and a seamless cross-channel shopping experience.

“The trick for etail decision-makers today is not just to closely follow how the technology is developing, but to also track and react to how customers are using it,” says Aurora Fashions group multichannel director Hash Ladha. “Social trends are changing so fast and expectations of where, when and how you can buy products are rising ahead of what we’re able to offer. People are arriving at websites and saying ‘why can’t I do this or that?’ So the pressure really is on to keep up.”

Here are some of the latest technological advancements currently shaping the etail experience.

  • Ratings and reviews

Many ecommerce technology experts believe user-generated content and word-of-mouth marketing is the future of online retail.

“It is the best tool for increasing conversion rates, sales, site traffic and reducing returns,” says Bazaarvoice international vice-president of client services Richard Anderson. “Customer-generated content is considered more valuable to the retailer as consumers trust peer recommendations more than any other source.”

That said, Anderson believes customers still seek expert opinion, whether it be from a manufacturer, shop assistant or salesperson as well as from their fellow shoppers. “Retailers need to be confident in opening up the discussion,” he says.

Bazaarvoice’s Ask and Answer product builds on reviews, bringing all contributions into a single community where customers can go to get the answers they need. The aim is to allow brands to gather information at content level and channel it into driving sales. The company also launched SocialConnect in July 2010, which extends the voices of customers from brand sites to social networks and collects consumer-generated reviews and stories directly on Facebook that can then be pulled back to a retailer’s website.

  • Online merchandising technology  

Amazon proved it first, and almost every other online operator has followed suit – customers really do appreciate recommendations such as ‘people who bought this CD also bought…’ and sales can improve on the back of them. In fact, Forrester Research identified web analytics and product recommendations as the two most highly prioritised technology investments for retailers in 2010.

By integrating CRM into the equation, recommendations can be much more personally relevant. The convergence of search technologies and merchandising capabilities has been termed ‘searchandising’, and this new discipline opens up opportunities beyond traditional product associations.

Cross-selling and up-selling can therefore work effectively online just as it does if a person is ‘hand-selling’ to a customer in store. Meanwhile, dynamic recommendation is a system of comparing items being viewed in real time with the collective intelligence from previous customers’ behaviours. Through mathematical techniques, it’s possible to present what is deemed to be most relevant to that individual.

Sophisticated online merchandising requires investment in search technologies, web analytics and customer segmentation. Transparency is key when deploying these solutions says Darren Vengroff, chief scientist at personalisation solutions provider RichRelevance. “As a retailer, you need to understand the decisions made by an automated recommendation engine. Whatever algorithms are used to deliver recommendations should be open to your inspection, and not concealed behind a ‘black box’ approach.”

  • Anti-fraud technology

‘Device recognition’ provides an additional layer of screening for etailers, beyond credit card, IP address, and personal identity checks, as online fraud carried out by organised gangs – often using internet cafes or remotely controlled infected computers – continues to pose a threat.

BRC Fraud and E Crime Group chairman Mike Wyeth says middleware that sits on an etailer’s server can pick up suspicious behaviour based on ‘device fingerprinting’ and cross-merchant transaction comparison. “So if the same device is being used but with multiple credit card account details in a short space of time you know that action needs to be taken,” he says.

The benefit of deploying such solutions via middleware is that the device recognition application can be rapidly configured, which helps keep pace with emerging threats without having to make major changes to the ecommerce platform.

Richard Higginbotham, head of marketing at data insight specialist Transactis, says customers can be asked for additional ‘one-time passwords’ to verify who they are, often via SMS communication. “If someone is changing a delivery address or suddenly ordering large amounts of goods, it could be a legitimate activity, so the one-time password can almost instantly give verification, and hopefully preserve the sale if it’s genuine,” he says.

Wyeth also advocates etailers collaborating with their delivery partners who are constantly gathering local information about addresses and behaviour that may be suspicious. “Tracking that intelligence and feeding it back to the etailer could be incredibly valuable,” he says.

  • Mobile Websites

With 60% of phones sold today being smartphones, and more users likely to connect to the internet via mobile devices than desktop PCs within five years, retailers are rushing into m-commerce with alacrity. Apps have been big news − Tesco’s Grocery app has been downloaded by 350,000 people, and the Argos app has achieved 800,000 downloads. However, many in the industry see mobile websites as the future, most likely operated in conjunction with specialist apps. John Lewis and Marks & Spencer have both recently launched m-websites rather than go down the app route, for example.

Speaking at Internet Retailing, M&S Direct director Dave Hughes said: “Even before the site launched, hundreds of thousands of customers were already shopping with us on their mobile phones and market data is telling us that this will soon be millions. The new site allows these customers to browse and buy from their mobile device without the frustrations that come with trying to do so on a traditional website.”

Today, customers expect to find you on their phone, says O2 channel business manager for interactive services Mark Cody. “While apps have the benefit of being used offline as well as on, and can be highly engaging, mobile websites will have a wider reach, are easier to find by people searching online, and are ideal for future growth as the browser is seen as the future.”

Mobile Interactive Group director of customer strategy Tim Dunn says mobile websites need to strip out unsuitable elements such as Flash, scrolling and zoom functions, and giving customers a light, simple system of search and navigation. “You can still have clever functions such as dynamic shopping baskets, and display carousels to make scrolling through product easy on a phone screen. Cookies can also be used through m-websites now, reminding customers of previously viewed items and helping to tailor content.”

  • Connecting to social networks

UK online traffic to social network sites such as Facebook and Twitter exceeded that for search engines such as Google for the first time in May this year, according to research by Experian Hitwise. Keen to cash in, retailers are increasingly adding Facebook or Twitter buttons to their product pages so customers can add details to their profile pages, and show friends what they like – prompting sales and deepening engagement. Others are actually selling through the Facebook platform. Recent news is that Amazon.com has integrated Facebook Connect into its website to help improve the relevancy of its purchase recommendations.

But web experts warn that brands need to be very thoughtful about how they interact with social networks. “The big challenge is ‘how do you push product out into the social media world?’” says Andy Houstoun, head of global marketing at ecommerce platform provider Venda. “If you stage events you have to ensure it leads customers back to your website, and that they remain brand advocates over time.”

True social commerce, as it’s becoming called, requires “deep engagement hubs”, says Bernie Segal, head of sales, enterprise SaaS at Infosys, which has just launched a Digital Consumer Platform, iEngage, to host such hubs. These are sub-sites that give brand fans a more intimate means of “liking what other people have bought, and buying what other people like”, says Segal. “Social commerce is about serving up more personalised content and through that, deepening the level of advocacy you can expect from these brand followers.” Another development in social commerce will be points systems so that customers are rewarded for ‘liking’ a product on Facebook, or for posting a product image on their Facebook page, says Segal. “These incentive programmes will be integrated into the cross-channel loyalty schemes so that points or vouchers can be redeemed anywhere.”

  • In-site search

Facet-based search navigation is the next level of search being discussed in etail as operators prepare for the capabilities and expectations of Web 3.0. Facet-based search goes beyond product listings, to involve ratings and reviews and comments on social media sites that have been ‘tagged’. This much richer content becomes part of the search source material, so search terms such as ‘most highly-rated’, ‘Colleen-style’, or ‘sofas for narrow doorways’ will help customers track down their very specific needs. “Customers are really driving navigation with the input they have provided through ratings and reviews,” says Venda global head of marketing Andy Houstoun.