New Promotion and Marketing Techniques for Online Selling
Last year, online retail sales in the U.S. grew about 25%–a truly outstanding record. But e-commerce still represents only about 6.2% of all merchandise sold. Some experts believe that there is a natural limit to consumer willingness to shop without benefit of seeing and touching the merchandise, or meeting the seller face to face.
But others feel online retail growth potential is still strong, and predict it will grow to well over 10% of total retail. The debate continues, and only time will tell. But in the meantime, online retailers are doing what they can to enhance their marketing and merchandising, to overcome consumer hesitancy and help the online channel meet its potential.
Here are some of the new techniques e-commerce sites are using to present merchandise in the most attractive, informative way possible.
Dynamic merchandise serving
By analyzing past consumer purchase data, merchants can serve up customized (“dynamicâ€) pages populated with the ideal combination of products—and profitability. Here’s how it works for Broadspan Commerce, an e-tailer of furniture and home furnishings. When a consumer searches inside the site for “canopy beds†at its DirectlyHome.com site, Broadspan analyzes that customer’s past navigation and purchase patterns, and assembles a selection of the canopy beds that are most likely to appeal, arranged in order of margin and sales conversion rates. Broadspan says its average order value has increased 17%, from $442 to $519, since introducing the dynamic product serving technology. Conversion rates from on-site searches have jumped 30%.
Custom product configuration
Timberland Co., the shoe store known for its sturdy, comfortable men’s shoes, launched a fast new configuration tool in August of 2005, with enormous success. Customers can design their own boots, for men, women or kids, based choosing their own colors, laces, stitching, embroidery, monograms and hardware. Despite a premium price of $175, which is $30 over standard styles, sales conversion rates on the custom boots have held up, the company says.
Online configurators are an excellent source of differentiation from offline retailers, because they give consumers a truly easy and efficient way to customize the product and get exactly what they want.
Borsheims.com, a jewelry store based in Omaha, Nebraska, uses a “Design Your Ring†configuration tool at their e-commerce site, where consumers can select their preferred band, the setting and the stone, and then match their custom ring to other pieces of jewelry. This service level allows Bonsheims.com to compete with much larger jewelry chains, especially among young people looking for wedding and engagement rings.
“Fuzzy†on-site search
Most websites—whether they are selling or just promoting—find on-site search technology a challenge. The problem is that search is so precise. If you haven’t sufficiently tagged your product descriptions, or anticipated exactly what words visitors will use to describe what they are looking for, search results can be disappointing.
A company called Transparansee is trying to address this problem with a tool called the Discovery Search Engine that delivers matches that are similar to—as well as exactly like—the specific search terms. For example, a consumer at a real estate site who puts in lots of specifics on various characteristics of an ideal house may end up with zero results. Transparesee makes it possible to deliver results that are close to the criteria, but still usable. Technically “fuzzy,†but ultimately satisfying to the consumer, and likely to result in a sale.
The price-match database
It’s a truism today that the Internet has vastly increased consumer ability to compare prices. But retailers are still struggling with how to react. Do you simply drop prices to meet the competition, in response to customer request? How much research and verification can you afford to do before matching (or declining) the competitive price request?
JensonUSA, an e-tailer of bicycles, parts and accessories, wanted to match competitive pricing, but found that their price-match researchers were handling a lot of similar requests, resulting in needless duplication. They also knew that during the time it took for the consumer to get approval for the price match from a customer service rep, their sales onversion rates were harmed.
JensonUSA decided to speed up the process, adding a link to their database that grabs up the most recent legitimate competitive price, and then offering that price automatically the next time the same price challenge arises. In the first month of using the new database, Janson saw sales jump 18%.
A new report from The eTailing Group, a Chicago consultancy, reveals that U.S. Internet retailers are not necessarily making the most of the analytic tools they have on hand. Most e-tailers (80%) said they spend fewer than 20 hours a week reviewing site metrics. The reason behind this dismal statistic may be the tools’ complexity: 47% of the respondents said they had too much data to process it efficiently.
