Thursday, December 10, 2009

Online retail : How Best Buy is using Semantic Technology to define a new trend

This downturn has changed the behavior of consumers considerably in the retail sector. Though, the retail industry, just in US, has been more than four trillion dollars in last few years but it has been affected by this economy in last two years. Despite of this trend, 80% of retailers feel that the online retail channel continues to be better suited to withstand an economic slowdown better than other channels. It is validated by recent observations in the retail sector:
  • Black Friday spending rose 0.5%, ($54 million), to $10.7 billion, this year from last year.
  • Online sales have been up 17% (Thurs. to Sun.) over the same period last year.
  • Cyber Monday has been up 11%, more than they did a year ago
  • Online retail has been growing more than 20-25% in countries like Germany, Italy, UK
  • Forrester Research projects that online retail sales will increase by 8 percent to $44.7 billion this holiday season

The channel is slowly maturing and with many of the easy wins now maximised, further progress will be much slower. In industries where consumer shifts as small as 1 percent can severely dent the profitability of brand, retailers now need to think more strategically about maximising revenue online. Textbook theory tells you that changes in the relationship between how much consumers are willing to pay, on the one hand, and their perception of the value they are receiving, on the other, underpins behavioral changes. There is also a strong trend where consumere are learning to live without expensive products and they are no longer willing to pay easily for premium brands. According to this article, the retailers need to be aware of following key trends:
  • As acquiring new customers becomes more of a challenge, retailers should switch more marketing budget to maintaining existing customers and driving repeat business
  • They must clearly communicate why customers should shop with them, and what extra benefits can be gained from doing so
  • Providing clear, accurate and detailed information on products, prices and additional charges is a key
  • Deep knowledge of your competitors’ online offerings coupled with sophisticated testing of different customer acquisition strategies will be crucial to stay ahead of the market

Till now, SEO, Search Engine Optimization, has been a successful strategy applied by online retailers to increase the traffic to their website but it has its own limitations - the links to the website doesn't communicate clearly why customers should shop with them and also doesn't provide clear information accurate and detailed information on products, prices and many other relevant things. GoodRelations ontology, which is just an year old, can fulfill those gaps and give retailers that extra advantage. It is a standardized vocabulary for product, price, and company data that can (1) be embedded into existing static and dynamic Web pages and that (2) can be processed by other computers. This increases the visibility of your products and services in the latest generation of search engines. I have explained some of the concepts of microformats and RDFa in one of my previous blogs but I will highly recommend you to visit website maintained by Martin Hepp, the creator of Good Relations Ontology. Martin has done a great job in coming up with a practical application of Semantic Technology which can deliver value. The best part is that adaption will eventually increase as the learning curve is so simple.

In his talk at the Search Engine Strategies 2009 conference in Chicago, Jay Myers, Lead Web Development Engineer for Best Buy, Co., Inc., reported very surprising effects of adding GoodRelations and RDFa to their products pages:

1. GoodRelations + RDFa improved the rank of the respective pages in Google tremendously. In fact, if you try the query "BestBuy Ferris Bueller" on Google, then the page  comes on rank # 1 ahead of the much more established page . This indicates a strong effect of GoodRelations + RDFa on Google's appreciation of a page. It is particularly surprising since the age of a domain has now a huge influence on ranking in Google - older ones get a much higher ranking. In this case, the semantically augmented one is just eight weeks old but it is still ranked higher!

2. Jay also reported a 30 % percent (!) increase in traffic on the BestBuy stores pages, e.g.

3. Yahoo observes a 15% increase in the Click-through-Rate (CTR). Nick Cox from Yahoo also recently reported that augmented search results, e.g. those with GoodRelations / RDFa in Yahoo get a 15 % higher Click-through-Rate (CTR).

So in short: While better visibility in traditional search engines is of course not the main intended effect by adding GoodRelations & RDFa rich mark-up, I think these findings are so substantial that any SEO / SEM consultant should apply it - now!
Kudos to Best Buy for showing leadership in early adaption of this technology! I don't know whether it is a tipping point or not but I do recognize that it is a very positive step in adaption of semantic technology by the retail industry! In the end, the most important thing is to give SEO experts and those who pay them an incentive to add rich meta-data now. I hope to see many other online retailers to join the bandwagon and take full advantage of this simple technology.


  1. Perhaps this is a reflection on how unfriendly to search engines the old page was; if you look at the code in some of the other bestbuy pages, they're quite ugly. The best effect of RDFa may have been to get them to author a good product page.

  2. nice article..thanks for the info

  3. Interesante. El camino Debería ir en esa dirección.

  4. Interesting - you hear a lot of anecdotal claims but it's great to see reports like this accompanied by evidence of actual results. Seconding your kudos to Best Buy for being a leader here, and sounds like semantic is something that online retailers may want to keep on their radar in the coming months.

  5. Fair play to Best Buy for taking the plunge and shifting to the online marketplace, there is such a large market out there that it's shocking to think that companies haven't made much of an effort to tame it yet.

  6. This is a smart blog. I mean it. You have so much knowledge about this issue, and so much passion.
    You also know how to make people rally behind it, obviously from the responses. You've got a design here that's not too flashy,
    But makes a statement as big as what you're saying. Great job, indeed.