Coremetrics' VP of marketing describes the type of info needed by ecommerce sites to better merchandise their products.
Merchandising is the critical bridge between customer acquisition and conversion for ecommerce sites. Done right, online merchandising gets people past the home page to view products and services. It entices them with cross-sell and up-sell offers to drive up average order value. It ensures that pricing is in line with the competition and helps visitors move effortlessly through shopping and checkout processes.
Online merchandising, however, is complex. Online merchants face difficult challenges as they struggle to categorize products in an intuitive manner, formulate promotional categories that drive sales of high-margin items and organize site content to create the highest probability of maximizing each buying session.
Many factors come into play in keeping visitors on your site and guiding them through to a purchase. That means there are many areas where merchandising missteps can occur-- missteps that can translate into lower revenues, lower margins and lower customer satisfaction.
Without an eye to merchandising, acquired traffic will likely be poorly qualified. Coremetrics' benchmark data shows that 27 percent of visits represent one-page sessions. Once people reach your site, ineffective placement can prevent them from finding the products they are looking for. Data shows that only 52 percent of visits have a product view. A variety of factors can affect this. We'll explore a few.
First things first-- getting them there
Understanding behaviors that lead to product interest and conversion are essential to successful merchandising. In particular, merchants need to delve into the marketing channels that not only brought visitors to the site but also brought visitors who purchased. These channels might include email, affiliates, paid and natural search, direct mail and even the retailer's own stores and catalogs.
Lands' End, for example, offers a catalog quick order feature for customers who prefer to browse the print catalog and then order online. The company tracks sales linked to this feature to quantify the contribution of catalogs to online sales. This multichannel analysis is proving to be so valuable that Lands' End has decided to feed online behavioral data into its in-house systems to identify which customers should receive catalogs.
Williams-Sonoma leverages channels that were successful in previous product launches to achieve similar successes for new products. "Before launching a new line of cookbooks recently, we dug into historical data to find out what kind of activity we got around our flash technology, which lets visitors look inside a cookbook," says Bridget Neumann, manager of eCommerce strategy and planning at Williams-Sonoma. "We identified the campaigns that drove people to the site for the previous launch. The data told us which tactics and techniques worked well and gave us a good idea of what to do again."
Identifying the right channels requires comprehensive data, comprehensive reporting and rigorous processes that facilitate coordination with marketing regarding products, promotions and onsite search. Merchants need the ability to segment customers by product or category interest to identify marketing links that attract visitors to high-margin products.
Odimo, online retailer of brand name watches and luxury goods and operator of websites Diamond.com, Ashford.com and WorldofWatches.com, used Coremetrics' Product Impressions Report (PIR) to analyze and track the results of their banner ad campaigns on MSN and Yahoo! The PIR displays how many times a product appears on a page, how many times it is viewed by customers, how many times it is placed in a shopping cart, and how many times it is purchased, as well as sales, net of returns.
"We had no idea if we had the right products on our banners before implementing Coremetrics and the PIR," says Darlene Smith, senior vice president of merchandising at Odimo.
Odimo observed a 50 percent increase in sales for affected products during the month following banner ad and website changes.
Organizing the site and analysis around the customer
Once you've attracted a visitor to your site, merchandising takes over, combining placement, design appeal, navigation and pricing to move the visitor through the sale.
Product categories represent internal product groupings, not how people buy. Merchants and site designers need to think in terms of categories that make sense to site visitors-- such as fall fashions, holiday recipes, gifts under $30 or overstocks. These promotional categories often align with categories in the retailer's store or catalog. Promotional categories allow merchants to increase profits and improve customer satisfaction. Groupings might be designed to promote high-margin items or to match products to the consumer experience, interests or needs.
Williams-Sonoma successfully leverages promotional categories within their navigation such as "New for Holiday," "Free Shipping," or "Gift Ideas" to promote new or popular items. Even within typical product categories, such as bakeware, promotional sub-categories such as "New Arrivals," "Williams Sonoma Favorites" and "Internet Exclusives" provide customers with alternative means to shop for products that meet their needs. These categories both expose customers to more products and encourage return visits, offering additional opportunities to generate revenues.
The starting point for organizing the site around the customer is, of course, detailed behavioral data about the customer. Next is the ability to organize merchandising reporting and analysis around the product and promotional categories that customers use-- not on internal reporting structures.
Reporting must allow merchants to understand behavior related to categories and items and to identify appropriate cross-sell items. It also needs to provide insight into the navigational categories customers use to find products, so merchants and site designers can determine which paths are used most. This information guides them in placing products effectively.
Next: Improving onsite search and keys for success. (Page 2 of 2)