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Sunday, June 15, 2008
Desktop widgets, tiny applications that enable a 24/7 link between a consumer’s desktop and an e-commerce site, are connecting customers and merchants like never before
By Bill Siwicki

Earlier this year, clothing merchant Due Maternity was considering ways to foster closer ties with its expectant mother customers. It wanted alternatives to traditional marketing, advertising and other well-worn tactics because those can be very expensive.

This summer, the retailer introduced a tiny, downloadable web application that sits atop a user’s computer desktop. The application graphically renders for a mom-to-be a clock that counts down the time to her due date and provides links to DueMaternity.com for information on pregnancy as well as products, coupons and special offers.

“We needed a way to get our customers coming back to our site. We needed to reach out in a meaningful manner without spamming them with e-mails,” explains Albert DiPadova, vice president of marketing and co-founder of Due Maternity. “You have to give customers something fun to play with these days.”

And so the retailer’s Countdown Widget was born. Due Maternity hired a graphic designer to dream up the look of the desktop application’s clock; in-house technical staff handled the Java programming required, with an assist from a free Yahoo widget-making tool, to create the wee application and link it 24/7 to DueMaternity.com. The e-commerce site continuously feeds data to the application.

During the first 45 days after launch, the application (see page 32) was downloaded around 10,000 times—customers were enticed with a 10% discount on select purchases—and sales directly attributable to click-throughs from the application to the e-commerce site hit $7,500.

The cost? $600. “We’re on track to realize more than $75,000 by the end of the year through traffic driven to the site from the widget,” DiPadova says.

Widgets are no longer just fictional product examples for conversations about hypothetical business scenarios. Quite the contrary; they’re now tiny web applications that can drive real-world business by strengthening the bond between Internet users and Internet content publishers and e-retailers.

A desktop widget appears as a small window about 2 inches by 3 inches to 4 inches by 5 inches and can be minimized and maximized like most applications. A user downloads a widget from a widget creator’s site or a widget aggregator site like Yahoo Widgets or Google Desktop Gadgets, as widgets are sometimes called. Once downloaded and installed, a desktop widget—filled with graphical and textual content and hyperlinks—maintains a connection with its host site, which constantly updates content.

Internet users have a plethora of desktop widgets from which to choose. Interest in using and creating desktop widgets has been on the rise since they arrived on the scene a few years ago. Yahoo Widgets, which launched in 2005, offers more than 4,800 proprietary and third-party desktop widgets. Google Desktop Gadgets, which also launched in 2005, offers more than 9,000, though many are designed specifically for insertion into web pages and require transformation through the Google Desktop platform to operate as desktop widgets. Then there are smaller widget players. For example, yourminis, launched in 2006, offers more than 300.

Because desktop widgets still are relatively new, Internet research firms have only now begun to collect usage data. The number of desktop widget users may be small, but interest is growing, industry observers say. “25% of all 210 million U.S. Internet users knowingly download applications from the web, so desktop widget downloads would be a subset of that,” says Emily Riley, an analyst at JupiterResearch, which, like fellow research and consulting firms, does not yet have hard data on desktop widget use. “So today it’s a small percentage.”

The cost to create a desktop widget can range from $500 to $20,000, depending on desired functionality. “It doesn’t take much, but it requires some technical skill,” says Ray Valdes, research director for web services at research and consulting firm Gartner Inc.

Another type of widget, crafted for placement on any web page, performs similar tasks often with more focused functionality. These web page-based widgets, also known as embeds, are distributed by Internet content publishers and e-retailers to the companies that host blogs, social networks, content sites and other web destinations. The goal is the same: to drive traffic and sales and boost brand awareness for the web page-based widget creators.

When it comes to desktop widgets, though, computer desktops are prime real estate, and space is limited. Computer users typically maintain important documents or spreadsheets, folders with routinely used files, and shortcuts to applications on their desktops. The aim of desktop widgets is to be included among these important items so e-retailers can be just as top of mind as the other items. To accomplish this, e-retailers have to learn how best to entice consumers to download their widgets and give them that prime space, and how to keep consumers interested so they retain the widget after the novelty of these mini-programs wears off.

However, once a widget is firmly planted on a customer’s desktop soil, it potentially can help an e-retailer reap rewards in terms of brand awareness, greater site traffic and increased sales by making the merchant a daily presence with consumers.

Desktop widgets create stronger customer/retailer bonds, increasing the level of engagement between the two, Valdes says. “A desktop widget is based on the notion of interaction and automating tasks. So a widget is providing value by helping a consumer offload a task—such as tracking new products—and giving back to them just-in-time information on an ongoing basis,” Valdes adds.

E-retailers with constantly changing product line-ups or extremely loyal customer bases are prime candidates for widgets, experts say. “Desktop widgets are good for products with routinely changing prices or products with highly anticipated launches, for instance,” Riley says. “Travel is a perfect example, with changing airfares consumers want to monitor. Another example is digital music, where a desktop widget user could see the top downloads of the day and be notified when new releases are expected. And any product that elicits passion from consumers would be a good fit; for example, a teenager who loves buying shoes could use a desktop widget from a shoe retailer to keep track of shoe sales.”

When it comes to consumers, those who spend a lot of time on their PCs and are comfortable with technology, early technology adopters, and avid online shoppers are the likeliest widget users, says Sucharita Mulpuru, senior retail analyst at Forrester Research Inc. “They could range from young customers to affluent, busy shoppers,” she says. “As long as a widget provides relevant content and a shopper is savvy enough with technology, a retailer can expect good usage and traffic.”

The trick, however, is making sure customers use widgets and keep them on their desktops.

“The challenge with widgets is delivering on the promise of automating tasks,” Valdes says. “A consumer has made an investment in time and attention and a marketer has to deliver on the consumer’s expectations. If an e-retailer provides something that is not very useful and is more of an ad, then the impact for the marketer will be negative rather than positive.”

Widget strategy

The whole idea behind desktop widgets is simple: Instead of a user going to a web site, the web site, in part, comes to the user.

“Anybody in e-retailing has to constantly be asking the question, ‘Where is the customer living and what kind of conversation does she expect us to have?’ If she evolves into new conversation spaces, her favorite retailer ought to go with her. Strategically it is critical that you keep up with where she is at,” says Dave Owen, manager of Internet customer relationship marketing at J.C. Penney Co. Inc., which is testing a desktop widget it launched in May. “If she is increasingly spending her time online, and on her desktop with other applications and you want to be part of her life, then that is where you need to be.”

Like Due Maternity, J.C. Penney launched its desktop widget, JCPToday, to cultivate closeness with consumers.

“In regular surveys our customers tell us they want to know about our offers,” Owen says. “She has a job to do—buy the clothing and furniture and other items for the family. And she has to do that in a cost-effective way that includes the right styles and meets her tastes. And she wants us to tell her how to cut through the clutter. The widget is us answering her questions.”

JCPToday is a little larger and more complex than most widgets (see page 28). The top half showcases the latest news, products and sales on J.C. Penney’s e-commerce site; a click on any of the small, horizontal message boxes connects a customer to the relevant page on the site. The bottom half is a weekly calendar that highlights a product of the day; consumers can click on any day of the week to get product information and images without having to leave the widget for the e-commerce site.

JCPToday then goes a step further than many desktop widgets. Users can click on one of two tabs on the right side of the widget to access The Scoop, which extends the width of the widget and shows information on ever-changing topics such as birthstones, and My Stuff, which enables users to change the appearance of the widget and provides a calendar in which users can enter reminders for gift-giving events like birthdays and anniversaries.

J.C. Penney declines to give results of its widget test to date, stating it is waiting until the end of the test phase in the fall. The retailer sent invitations to download the widget to a cross-section of customers on its e-mail list, and it reports thousands have downloaded the application. “We have been very satisfied to see the number of customers using the widget to link to information on a daily basis,” Owen says.

Boosting word of mouth

Clothing and accessories retailer Moosejaw Mountaineering’s strategic goal for its desktop widget, Moosejaw Communicator, is to boost word of mouth and get even tighter with its most valuable customers.

“Customers that download our desktop widget are hands down our most loyal. They are huge believers in the fun Moosejaw Madness culture we create and are an extremely valuable source of word of mouth advertising,” says Jeffrey Wolfe, COO and CFO. “The desktop widget is an invaluable tool for communication and advertising. A widget adopter is a customer for life. Our focus right now is on growing the adopter base.”

Created in house for $15,000, Moosejaw Communicator (see page 29) has so far been downloaded by thousands of customers, Wolfe says. The desktop widget, launched in November, features two primary sections: The Lowdown highlights a deal of the day and Daily Remark features comical content from Moosejaw Madness web pages. Personalization features are on the horizon.

A big advantage

“The desktop widget alerts customers 10 minutes before the rest of the world whenever we launch a new deal of the day. These offers always sell out very quickly so downloading the widget is a big advantage,” Wolfe says. “It also alerts customers whenever new daily remarks and trivia questions are posted. The next step for the widget is displaying our photo of the week, where we feature customers holding up the Moosejaw summit banner in locations around the world.”

Preliminary results are in on Moosejaw Communicator users: They purchase approximately four times more frequently and spend about six times as much money as the average Moosejaw customer.

Strategically speaking, Moosejaw believes widgets will be important in e-retailing’s future. “The ability for a retailer to control real estate directly on a customer’s desktop is revolutionary,” Wolfe says. “The opportunities for driving loyalty and sales are limitless. And I know of no more convenient way to get valuable information to a customer than a desktop widget. Retailers that can consistently grow their widget adopter base faster than the widget attrition rate will enjoy a huge competitive advantage.”

Growing the number of consumers using widgets means developing plans to get them to download the desktop applications in the first place. Moosejaw entices customers to download Moosejaw Communicator with its advance notice of daily deals. Due Maternity lures shoppers to download Countdown Clock by offering product discounts.

To persuade customers to download its widget, unveiled in April, Shop.com is thinking financial perks. The e-retailer is considering offering customers who download its SHOP.COMpanion widget 5% off orders placed during the first 30 days of use along with possible rebates on orders placed through the widget.

SHOP.COMpanion (left), which cost a couple thousand dollars to create in house over the course of one weekend, has received tens of thousand of downloads from the e-commerce site as well as from aggregator Yahoo Widgets, the company reports. The e-retailer promotes the widget in the footer of all its web pages but is not yet making a big push, instead waiting to see how initial use fares.

Constant link

Through its constant link with the e-commerce site, the Shop.com desktop widget enables shoppers to search for products without having to go to the site. The widget displays the top 10 search results accompanied by product descriptions, images and prices. Once a shopper finds an item she wishes to purchase, a click on the product takes her to the site. The e-retailer plans to add functionality to the widget, including wish list and gift registry.

Without enticements, SHOP.COMpanion’s downloads in the tens of thousands show significant interest by consumers. The result has been a small boost in traffic and conversion. “It’s an easy way to search through millions of products, and a bigger boost is coming,” predicts Vince Hunt, vice president of engineering at Shop.com.

Shop.com, Due Maternity, Moosejaw Mountaineering and J.C. Penney report thousands of widget downloads to date. Countless more widgets have been downloaded from all kinds of web sites that span industries and interests. Widgets are without doubt a novelty of great interest to a great many Internet users. The big questions are: What happens when the newness wears off? And what will Internet retailers have to do to ensure customers keep widgets on their desktops and continue to use them?

“It’s one thing to get a customer to download our widget and play with it for a few days. It’s a very different thing to convince them to adopt the Moosejaw widget as a part of their daily routine,” Wolfe says.

One way Moosejaw attempts to keep customers widgeting is through bribery, including advance notice on deals. “We give our customers extra Moosejaw Rewards points,” Wolfe says. “Moosejaw’s customers are always glad to accept a good bribe.”

Moosejaw also believes a significant chunk of desktop widget users will stay on board because the very nature of a widget is something potential users consider to begin with.

“Our customers do not download the widget because it’s a novelty. It’s too annoying to have on your desktop if you don’t truly care about the content,” Wolfe says. “Moosejaw has a cult-like customer base and they want Moosejaw to be part of their daily routine. That’s why they download the tool. And we will always keep the widget content fresh and exciting. We expect retention to be the area where we are most successful.”

First to know

J.C. Penney is using a similar strategy to keep customers using its desktop widget for the long term. For some new products, sales and promotions, widget users get the word first, and it is keeping content ever-changing and fresh, Owen says. “It’s about being the first to know,” he adds. “You can get the information without having to open an e-mail, which is very convenient.”

The retail chain is planning to survey widget users this month to gauge customer satisfaction with the widget and discover what it can do to ensure continued use.

Due Maternity is following a parallel path to Moosejaw and J.C. Penney. “The proposition is download the widget to easily keep track of your due date, but also for special savings,” DiPadova says. “It’s really the special savings that we hope entices customers to download and retain the clock.”

The popularity of widgets has grown exponentially over the past couple years because people want easy access to information and many do not want to dig through search engines, he adds. “We’re looking for ways to use widgets to improve the fun, entertaining aspects of our site,” he says. “Widgets are a way for us to stay entertaining and relevant, which will keep customers coming back for more.”

Gartner’s Valdes, however, says retaining desktop widget users will be a bigger challenge than some may think. “The novelty definitely will wear off, so it’s more tactical not strategic,” he contends. “There is a short-term effect here that retailers can take advantage of. After the novelty wears off, it’s all about how much value there is in that particular widget, how much help it provides a user. For a retailer to get longer term value, they still can exploit the novelty effect but there has to be something of pragmatic value.”

To get and maintain mass adoption will be a challenge; widgets must have a truly compelling value proposition, or an e-retailer must really tap into its most valuable customers, analyst Mulpuru says. “But given that it is not that expensive,” she adds, “if you can get a few thousand customers to download it, and those few thousand make purchases, it can be a good investment.”

Being there

Desktop widgets’ strength, experts say, lies in tapping into the psyche of valuable customers and fostering stronger ties. And e-retailers pioneering widgets hope that stronger ties translate into stronger business.

Getting more consumers to Shop.com and engendering loyalty is the bottom line, says Shop.com’s Hunt. “You need to be where people are,” he says. “Anyplace where people are connected to the Internet, like the desktop, we need to be. And that will drive more traffic and more sales.”


Original Article Found at Internet Retailer

by: Shawna Seigel

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