eCommerce Tips for Better Online Sales

Details: Tuesday, 27 December 2011 11:10; Hits: 2039

ECommerce is growing and there are many opportunities for those websites which are now prepared to take the time to really understand what online consumers want.
Online spending is increasing. A convergence of more web savvy buyers, a maturation of the technology and eCommerce website improvements is leading to a bumper year in online spending with the figures about to get better.

The picture in the English speaking parts of Europe is one of quite optimism:

Online shoppers in the UK are expected to spend £162 billion ($336 billion) per year on products via the internet by 2020.

And by the end of this year alone, ecommerce sales to British buyers will total £40 billion ($82 billion), according to the price comparison site uSwitch.com.

And:

Irish adults spent an estimated €2.96 billion online in 2010, an increase of 39% on the 2009 figure. The figures are part of an annual survey* carried out by Visa Europe. Half the respondents said that they save between 11–30% by shopping online.

This however does not mean that the recession is over or that the global credit crunch can be forgotten. As a matter of fact the increase in online sales is the clearest indication yet that consumer buying habits have changed with consumers being prepared to do a lot of research and look around in order to get the best deal in terms of price and quality.

eCommerce bumper year leads to great online sales

The picture which emerged from Christmas spending in 2011, for instance, is a robust one:

People have spent $18.7 billion on e-commerce sites so far this holiday shopping season, 15 percent more than last year during the corresponding days, according to comScore. They spent $6 billion the week that ended Dec. 2, including Black Friday and Cyber Monday, and spent more than $1 billion on three separate days that week, after breaking the billion-dollar mark for the first time on Cyber Monday last year.

But as web financial trend analysts say this is not an indication that the economy is picking up fast, rather that consumers are becoming more discerning which is driving spending in a specific direction (i.e. online). This presents retailers with a real challenge:

[To drive sales, retailers] have offered free shipping, which Web shoppers have grown accustomed to, at record levels, comScore said. Almost two-thirds of holiday purchases during the heavy shopping weeks before and after Thanksgiving included free shipping, about 10 percentage points higher than last year.

And many retailers extended their deals beyond Cyber Monday. Target.com called its week of sales Cyber Week, and Amazon.com started a week of deals on Sunday.

In eCommerce Price is Important

What all this means for eCommerce websites is that careful analysis of online visitor behaviour is now the lifeblood of your business. Google Analytics has to be the starting point of your day, particularly when it comes to determining website abandonment points.

Shoppers go online at every opportunity Abandoning a purchase, online, is defined as the moment an online visitor leaves a website without paying for what he has in his shopping cart, or leaves a website after he gets to the payment page for a particular product or service. Seeing how a significant amount of effort is invested in getting a website visitor to that particular point (and in terms of marketing and design this then counts as a success), it becomes crucial to then look at abandonment figures at that point and work hard to determine the reasons behind them.

On average only 2-3% of website visitors convert to paying customers for most eCommerce websites. Studies conducted by MIT, on the subject, show that abandonment rates spike at specific price points: the $100 spike is the most significant and has the highest volume, but there are similar spikes at $250, $400, and $500. This is the clearest indication yet that price continues to be an important threshold barrier. In the offline world it was so clearly understood that it gave rise to the .99 culture where things might cost $99.99 but never $100, for instance.

This is important, again, in online sales. The fact that now online visitors are no longer bedazzled by the technology, draws attention back to the area that matters: the psychology of the one making the purchase.

Price abandonment points, however, also occur at low prices. T he reason, according to analysts at SeeWhy is that as the ratio of shipping cost to the value of the basket approaches 100%, customers abandon their cart. They see it as being a bad bargain and its value is negated by the shipping costs.

A study conducted by MIT on all this showed that over 90% of these customer prospects go cold within an hour. This means that there is a window of opportunity to capitalize on them and still make a sale, but before we even get there it is important to see what lessons we can learn from the behaviour of visitors who abandon a purchase at the price point:

01. Price is critical. When it comes to creating price points on your website you need to work really hard to generate value. If you cannot get past critical perceptual threshold barriers such as the $100 price tag, for instance, you need to be able to create a complete picture of value in your online visitors’ minds.

02. The Number of steps to the shopping cart is important. Create too many steps to checkout in your site and you are stretching your online visitors’ patience. Then it only requires one additional element (such as a price point they psychologically object to) and they will abandon the cart.

03. Analyze traffic figures. The behaviour of those who come to your website is a critical element of its success. You need to be able to know exactly how many get to a specific landing page (such as the checkout page) and how many abandon it and then you need to start thinking about what else you can do.

04. Shipping costs are important again. It used to be that shoppers compared prices but shipping was something which they overlooked. Amazon’s success this year with free shipping for those who spent over a certain amount and low-cost shipping prices (and choices on the type of shipping) are a signal that shipping is now an important element of the decision making process which leads to a purchase.

Online Customers who Abandon are not Lost

Almost 75% of those who abandon a page at the purchase point return to the site. The statistics, released by ComScore, indicate the level of the challenge facing online retailers. The challenge is to convince in terms of quality and value.

Abandonment occurs because some doubt has been created regarding the suitability of the products. When those who abandoned a website at checkout level return and then abandon it again studies show that 53% of them will not return again within 28 days. In effect these are lost forever and will count, if they return at all, as new customers in terms of the amount of work which needs to be done to convince them to make a purchase.

The need for close analysis and action becomes obvious when we take into account SeeWhy’s figures which show that 8% of shopping cart abandoners returned without any form of remarketing. However, when a real-time remarketing campaign was added, the total return rate increased to 26%, with the impact on the return rate from remarketing greatest within the first 12 hours following abandonment.

This leads to a critical examination of checkout abandonment rates and the implementation of very specific tools:

01. Real-time marketing: Have some form of real-time marketing on your website which allows your online visitors to be able to interact and dispel doubts which may be preventing them from making a purchase.

02. Email follow-ups. ComScore figures showed that those customers who abandoned a website at the purchase point and were marketed to by email were more likely to return and when they did their average spend was 56% higher than the spend of new customers.

03. Special offers. Put in place special offers and deals which help to stimulate demand and maintain awareness of your presence in the minds of those you need to come back to your site.

eCommerce continues to grow and opportunities are actually increasing. However the automatic website + products + checkout = sales equation no longer works. Now you need to work hard for every online sale you make and you need to convince those who get to your site that you can deliver in terms of value and quality.
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