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Conversion rates, navigation and usability, and email marketing were on the minds of retailers attending the eTail2003 conference this month in Boston. The majority of attendees were from large land-based retailers, like Gap, JC Penney and Neiman Marcus.
Executives from large retailers gave presentations on a variety of topics over the course of the 2-day event, including a roundtable of CEOs from Bluefly.com, BlueNile.com, eBags.com, Road Runner Sports, Go Toast and CheetahMail, who discussed "What's Next: Understanding the Future of E-Commerce."
Other presentations included such topics as "Effectively Focusing Your Site Content with the Ultimate Goal of Driving Profitability," and, "Understanding Your Customers' Experience at Each Touch Point to Increase Conversion Rates." Some of the lessons learned by large retailers can be applied to small ecommerce sites.
Conversion Rates & Other Metrics
The average conversion rate for the ecommerce industry is about 2-3%. Conversion is when a visitor to a Web site makes a sale, or has been "converted" into a paying customer.
Conversion rate is defined by how a prospect moves in stages through a company's sales process, according to Bryan Eisenberg's book, "The Marketer's Common Sense Guide to E-Metrics." Eisenberg is a principal of Future Now Inc. http://www.futurenowinc.com, and WebTrends was giving out copies of his book at their booth.
Eisenberg's says there is value in measuring each step of the conversion process, not just the end result. A visitor: registers; creates a personal profile; participates in a chat forum; qualifies themselves by defining the product or service they desire. By measuring and analyzing each step, you can see if there are problems that ultimately get in the way of making a purchase.
The objective of an ecommerce site is to increase sales and decrease marketing expenses. Basic metrics include sales; returns and allowances; sales per visitor; cost per visitor; and conversion rate. Companies like WebTrends have products that allow Webmasters to take raw numbers from their site logs and turn them into meaningful statistics. The only way to know if a new advertising campaign or site design is effective is to measure performance.
Improving Site Search & Navigation
One way to increase conversion rates, according to eTail presenters, is to improve searching and navigation on your Web site. Robert Wilson of 1800Flowers.com said his site increased conversion rates when they implemented linguistics analysis and spell correction capabilities on the site. For instance,
- If you type in lily, the search engine will bring back results for lily and lillies.
- If you type in chrysanthenum, the search engine will bring back results for chrysanthemum.
Jakob Nielsen wrote in his latest issue of Alertbox, "The first law of e-commerce is that if users cannot find the product, they cannot buy it either" http://www.useit.com/alertbox/20030825.html. While the guru of usability wasn't at the event, the presenters echoed his sentiments.
Wilson credited Endeca for improving conversion rates on the floral retail site by improving the search and navigation functions. Before using Endeca, visitors to 1800Flowers.com would encounter 13 pages of results when entering the term roses in the search engine. Wilson said that 80% of the visitors would drop off by page five.
Now that the site has implemented Endeca tools, a search for roses will bring up best-selling products on one page, along with a guided navigation in the left column that allows them to drill down to find what they are looking for.
Wilson said the improved search and navigation also educates people about what 1800Flowers.com sells. For example, one of the options on the left navigation bar might include the word "Lenox" after someone searches for roses. Many people don't realize the site sells Lenox products until they see that option.
Test, Test, Test
Presenters were in favor of testing all aspects of a Web site's performance. Usability testing was mentioned as a critical tool for testing a site's ease-of-use and navigability. 1800Flowers.com's Wilson said "watch what people are doing" when conducting such tests.
At a CEO Roundtable, the concept of A/B split testing was discussed. One CEO had tested an alternative payment method by making it visible in checkout for some visitors, and hiding it from others. They also studied the checkout process and redesigned the pages where people were "falling off."
Adam Bane, a manager at FireClick.com, said testing has proven that the more pages you eliminate for customers going through the Checkout process, the better. He said etailers should simplify site design, so users are not frustrated. You can also test many aspects of Web site design, including colors, to see what works best with customers on your site.
Email Marketing
Neiman Marcus' VP of Marketing, Michael Crotty, said the retailer has acquired a big group of customers through the Internet, many of them who are located far from the physical stores and who hadn't been receiving their catalog. Neiman Marcus gets their store sales associates to sign up customer emails (which can be difficult, since the associates are commission-based and feel it's a conflict).
Many high-end retailers have moved slowly in their ecommerce initiatives. Crotty said Neiman Marcus has been getting more aggressive about including the URL in its catalogs and including inserts in packages. The company runs periodic sales exclusively for email customers.
Email lists are critical for ecommerce sites as a way to communicate with customers. When sending out an email to customers, "always have a message they want to hear," said one email expert. While there was concern about the effect of unsolicited email on email communication, the problem of spam filters did not surface in presentations or Question & Answer sessions.
Scott Heimes of Target Direct discussed how Target attracts customers through "sitelets," which are marketing-focused microsites targeting certain segments. Target's sitelets link to products for sale on Target.com, their ecommerce site powered by Amazon. They also send out weekly emails to people who have signed up for subscriptions on the sitelets, which keeps subscribers up-to-date, and helps drive traffic to Target's sites.
Summary
The keys to success, according to large etailers, is to:
- offer compelling content for your core audience;
- improve search and navigation on your site;
- test your marketing, promotional and design campaigns;
- measure and analyze site metrics;
- collect email addresses and send useful information and promotions to those customers.
One CEO commented on the fact that he's often asked how to appeal to a broader audience. He said it doesn't work. "Be true to a core audience." Other executives agreed. Having an affinity with a common group, with common interests and issues, creates community and is effective for ecommerce sites. And, of course, keep an eye on those conversion rates.
2003 Conference Agenda:
http://www.wbresearch.com/etail2003/agenda.html
2003 Exhibitors:
http://www.wbresearch.com/etail2003/exhibitors.html
The topic of next year's event is, "Driving Increased Profitability Through Innovative World-Class Multi-Channel Retail Strategies," taking place in Palm Springs, California, February 23-26, 2004.
http://www.etail2004.com
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