User-generated reviews and a long tail of offerings are key to a good e-commerce site: eTail executive panel

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PALM DESERT, CA - Chris Andersen's keynote on his book "The Long Tail," in which he argues that selling less of more is key, was the inspiration that led the morning panel titled "Key Industry Trends for 2007 and Their Implications for Cross-Channel Growth Strategies: A Chief Executive Officer/President Panel Discussion."

Steven Skinner, president of Home Depot Direct, said that the long tail theory has helped the retail giant with its business.

"As we look at the long tail effect on Home Depot Direct, what it reminds me of is the endless aisles in the 1990s and special-order business where you take a kiosk into the store to make it easier for customers to order a variety of products that you can't fit in the store," Mr. Skinner said.

The Internet is another factor in this, as Home Depot stores feature five or six patio sets, but has 15-20 choices on the Web site, making more products available to different buyers. However, there are some limits. The reason that the site does not carry 100 choices is due to the cost of sourcing the product and getting competitive prices from the manufacturers. Mr. Skinner said that he decides on what to carry based on buying power and keeping costs low for customers in the first place.

Macys.com also provides more SKUs on its Web site with extended sizes and colors, but the retailer says that there must be a balance between carrying too much and too little.

"The Web can do more than the store," said Kent Anderson, president at Macys.com. "We are always challenging ourselves to bring more to our customers. It is great to have all of these items, but there is cost [involved], so you have to make decisions and decide what will bring value to the customer."

Bringing value to the customer can also be translated into community forums on retail sites. Jeff Housenbold, CEO at Shutterfly, talked about the benefits of letting consumers say what they think.

"Having customers become evangelical for your brand is the best way to acquire new customers and retain loyalty," Housenbold said.

Kent Anderson agreed that customer input is key to brand-building.

"I really do think that social networking is part of the shopping experience, which I would not have thought in my past," he said. "The customer is giving you feedback on products … more information that you didn't have before. You are interacting with your customer on a whole new level. The idea that a customer wants to download videos to show other customers how they use a product, how they look in a product purchased at Macy's, is phenomenal."

Home Depot has recently begun a campaign called True Stories on its site, where customers can create stories about how Home Depot has helped change their lives. The retailer is planning to take those stories and make advertisements out of them.

"I think of social networking as leading the customers to us in a form that allows them to transparently communicate with us, which lets them communicate how good or bad we are doing, and I think this is incumbent for all of us to provide if we are going to survive in 2008, 2009, 2010," Mr. Skinner said.

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