Category: Merchandising

Beyond the Buy Button: The Huge Additional Value of Retail Websites

Sometimes, I think we focus so intensely on the e-commerce sales of our sites that we miss the overwhelming additional value they bring to our businesses. Retail websites, particularly for multi-channel retailers, are more multi-dimensional than any other channel and any other brand vehicle. We fail to recognize the value of these sites beyond the buy button at our own peril.

Some are starting to see the additional value. During her presentation at the Retail Innovation and Marketing conference in San Francisco last week, Express Chief Marketing Officer Lisa Gavales talked about her epiphany surrounding Express.com’s value to the brand. It was Express.com’s traffic numbers that sparked the light bulb in her head. She realized that Express.com got as much traffic in a week as all of the Express stores combined. In other words, half of Express brand interactions were occurring on Express.com. Lisa immediately understood the marketing value of such high levels of engagements from Express’ customers. So much so, in fact, that she came to a conclusion she deemed controversial during her presentation — Express.com should be a marketing vehicle first and a direct sales channel second.

After the presentation, my good friend Scott Silverman, Shop.org’s Executive Director, asked me if I agreed with Lisa’s positioning of Express.com. I rambled on a bit before essentially saying “yes and no.” I’ll now take this space for what I hope is a more coherent answer.

I completely agree with Lisa that retail websites are much more valuable to the overall business than their direct sales indicate. Applying resources and strategic importance to sites based only on their percentage of sales is a mistake that could prove very costly in the long run. Customers use our sites for many reasons beyond direct transactions and our failure to highly prioritize those intentions is a disservice to our customers that will affect our bottom lines. But the value of our sites goes well beyond just marketing and direct sales and simply switching priorities is not enough. Furthermore, I worry that prioritizing marketing higher than everything else will lead to the types of conversion problems I previously discussed in my post “Conversion tip: Don’t block the product with window signs.

Let’s consider some of the many values a retail website provides for a multi-channel retailer:

  • Marketing vehicle
    As Lisa noted, the marketing value of our websites is immense. We are getting tons of traffic, and each engagement is an opportunity to enhance our brands. (Of course, if we’re not careful, the opposite is also true.) Websites are a highly efficient way to strengthen the Customer Engagement Cycle. Both online and offline marketing vehicles can direct customers to our sites to further enhance our messages. Our sites are also a great way to tell people about our stores on both a collective and an individual level.
  • Merchandising vehicle
    Customers come in droves to our sites to learn more about the products we sell, whether they intend to buy online, over the phone or in our stores. Our sites have to essentially be our best and most knowledgeable merchants. They have to lead customers to the right products for them and provide the right information for them to make a selection, regardless of the channel where the purchase takes place.  This is a huge, often untapped, opportunity for quality merchants to reach their customers and sell them the right products.
  • Customer research tool
    This is a bit of a double entendre. As mentioned above, our customers are certainly using our sites for their research. But we can also use our sites to learn more about our customers. There is a wealth of information to be had about what our customers are doing and what they desire. Not only can we see what they purchase, but we can also use web analytics to see what they look at. With tools like those provided by ForeSee Results (shameless plug), we can also know what they are thinking, what they are intending to do, and how they are perceiving our brands. All of this can be done fairly easily and inexpensively in ways that are either impossible or impossibly expensive in the physical world.
  • Customer relationship enabler
    We can continue to build relationships with our customers by applying what we’ve learned above to give them better experiences. The applied knowledge of our merchants combined with the long-lasting memory of our websites should allow us to constantly serve our customers better. As we focus on building those relationships with more personalized site experiences, more informed personal interactions via contact centers and in-store, and more relevant email and direct mail communications, we will build stronger loyalty with our customers.
  • Community builder
    Websites also give us ways to connect our customers with each other. Our brands can act as a central hub for like-minded customers to find each other and help each other find products that meet their needs or solve their problems. How great is that? We can make these connections both via our own sites and via social networks like Facebook. Either way, it’s another way for our brands to provide services for our customers. Our sites can also allow our brands to be more localized by providing additional vehicles for our stores to connect with their communities.
  • Sales driver — in-store and online
    And, of course, we can sell stuff. We can sell lots and lots of stuff online. Our sites are still not where they need to be for maximum usability, so we have plenty of opportunities to improve their ability to sell directly. But we also have lots and lots of opportunity to drive traffic into our stores. We can show inventory; we can let people buy or reserve online and pick up in-store; we can host coupons;  we can help people find a store close to them; we can provide reviews and recommendations to people standing in our stores (whether via kiosks or mobile phones). The possibilities are endless.

These site values are not mutually exclusive. Their value in combination is exponentially higher than any one individual value. Therefore, it’s critically important to consider our sites holistically when determining their place and priority in our strategic plans. We need to consider their combined value when we determine allocation of resources and organizational structure.

Too often, though, resources and executive attention are not apportioned to the site according to this additional value. And we often don’t even measure these additional value points (which might explain the lack of resources and executive attention). If our most important measures of our sites revolve solely around direct sales, we will continue to minimize the importance of all other values of our sites.

I believe the multichannel retailers with the brightest futures in this new decade will be those who fully embrace and leverage the multi-dimensional value of their websites.

What do you think? How is your site valued in your organization? What retailers do you think are most recognizing the additional value of their sites?


A Convenient Truth

Easy buttonConvenience. We value it more than I think we sometimes realize. We’re willing to pay more for it, and we’re willing to sacrifice quality in exchange for it. So it stands to reason that delivering convenience for our customers can lead to a pretty profitable equation for retailers.

Consider the convenience effect of some of the more popular innovations in recent years:

  • Mobile phones. We love our mobile phones,  even though they’re more expensive and of significantly lesser sound quality and reliability than land lines. And now we browse the web on our tiny smartphone screens.
  • Digital music. While it’s getting better, the sound quality of digital music is not as good as CDs (and some people say CDs aren’t as good as LPs). And we happily listen to our iPods over poor sound quality earbuds because they’re a lot more convenient than bulky headphones.
  • Camera phones. Digital photography with nice SLR cameras is finally nearing the quality of film, but cameras on phones have a long way to go to get to that same level of quality. But it sure is easy to post photos on Facebook and Flickr from a camera phone.
  • Diet pills.  OK, these aren’t as widely adopted as the previous examples (yet), but they’re the easy way out for weight loss even though there are some less-than-pleasant side effects. (Hint, you don’t want to sit next to an Alli pill taker on a long flight.) Of course, if you’re not into pills maybe you can still avoid exercise and get some six-pack abs with the Vibro-Belt.

I would be remiss if I didn’t mention the immense convenience of e-commerce and the effect it’s had on retail. But we cannot rest on our laurels as the desire and demand for convenience knows no bounds.

The threshold for inconvenience continues to get ever lower. We often complain about how many clicks it takes to get to what we’re looking for on a web page. Think about that for a moment. The energy required to cause our index fingers to press a button too many times is irritating. Some might say it’s not the energy, it’s the time. OK, fair enough.  Then the “waste of time” threshold starts kicking in when we are forced to wait three to four seconds for a page to load. We’re busy! We haven’t got that kind of time to waste!

My favorite example of the power of convenience is the Kindle. Amazon managed to make the paper book seem inconvenient. If that doesn’t tell you that just about everything can be made easier, I don’t know what will. People (and I’m one of the them) are willing to drop hundreds of dollars for a book reading device that still doesn’t format as well as a paper book. But it’s so light and so much easier to hold in one hand than a hardcover book. You can lay it flat on the table. You can carry lots of books around easily, which is very nice for a traveler like me. And you can get books in an instant with the wireless connection, which is soooo much more convenient than plugging the device into a PC for a sync. I sometimes feel ridiculous saying things like that, but I’m not going back.  And I’m not alone; people write long blog posts professing their love of the convenience the Kindle brings.

But this post isn’t a social commentary. It’s about recognizing an opportunity to make money.

So, how can we focus our businesses on the convenience opportunity? Here are three places to start:

  1. Start with website usability
    We should start with our sites because they are the low hanging fruit. The promise of convenience with e-commerce is high, but all too often we put obstacles in our customers’ way, many of which I’ve written about previously. Where are we causing customers more clicks than necessary? Why are we requiring all those clicks? Is it a lack of planning on our part, or are we putting our immediate priorities ahead of our customers’ needs? Have we overwhelmed our customers with choice? How can we make narrowing our selection easier and quicker? And let’s not forget site performance. How fast are those pages loading?
  2. Re-examine the store experience
    We need to continue to think about how our in-store experiences can be easier and more convenient for our customers to shop. Paco Underhill provided some great tips in his book,  Why We Buy. We can also look to a cross-channel strategy to allow technology to provide some conveniences. How can we bring customer reviews and recommendations into the store? Is “buy online pickup in-store” a desirable convenience to offer? How about accepting payment via mobile phone or PayPal in our stores?
  3. Consider our customers’ lives – what could make those lives more convenient?
    What’s life like for our customers? If she is a busy mother of young children, can we do more to help her easily put together some nice outfits for the kids (or herself) to free up time for answering emails, paying bills, or maybe, just maybe, giving her time to relax in the bath? Does it make sense to give our customers the ability to automatically replenish certain items at certain intervals? If we think hard, we can probably find ways to improve certain tasks that don’t currently seem difficult. If the book can be made more convenient, there are no limits.

Sometimes I think we get so caught up in our metrics and the particulars of our businesses that we forget about our customers’ needs. After all, retail is really a service business. Customer convenience can and should be a key part of our value proposition. When we find ways to make our customers’ lives easier (even by just a little bit) we are providing services and products our customers will be willing to buy — and at prices that are nice for our bottom lines.

What do you think? Is customer convenience the right strategic target for us? What ideas have you implemented to improve convenience?


Conversion tip: Don’t block the product with window signs

My friend Bryan Eisenberg is always telling retailers, “You don’t have traffic problems. You have conversion problems.” When 95+% of the people who come to a site don’t purchase, it’s a hard point to deny. Could giving customers quicker and better access to the product be one way to start to solve the conversion problem? My experience says Yes.

A quick story

Imagine walking into a store and smacking into a giant promotional banner that stretches from the ceiling to chest level. Below it and to its right hang a series of smaller promotional banners. A few feet behind the banners, you see a series of doors with signs above them that appear to represent different product categories. You push through the banners and open the door under the “Dresses” sign. There you step into a room where a flashy video projected on a large wall highlights stylish dresses and beautiful models and also runs copy about the same promotion you saw on the banner at the front of the store. The wall to the right features several smaller signs for various promotions. The wall to the left is littered with 20 or 30 doors, each with a sign above it for what appears to be a type of dress.

Nowhere in the room are there any dresses.

You pass through the door labeled “Casual dresses” and finally see actual merchandise.

Does that story seem ludicrous? Then why is that basically the experience on so many retail websites?

In brick and mortar retail, we use promotional signs in our windows to draw people into the store, where we expertly display lots and lots of product to customers the moment they walk in the door. We certainly reinforce our promotional messages with signage throughout the store, but we never block the product with the signs. On our sites, our promotions seem to be more important than our products. What message are we sending to our customers about the value of our products when promotions get more prominence than the merchandise?

When customers arrive at our home page, they’ve already effectively entered the store. So, why are our “window signs” blocking the product?

Apparel and department store sites seem to have almost uniformly adopted the experience described above, but most other retail sites that I’ve seen don’t stray too far from “the window sign” experience. Consumer electronics and computer sites often feature a few specific deals or featured products, but otherwise they generally follow a similar approach. In fact, about half of the Internet Retailer Top 25 sites on my recent viewing didn’t show any products on their home pages, and the remainder only displayed a very few select products.

Are we missing conversion opportunities by taking too many pages to get to the products?

Certain retail categories, like apparel, books, jewelry and flowers/gifts to name a few, seem to have large customer contingencies who are prone to browsing to see what’s new. Physical stores in those categories absolutely cater to the desire of customers to check out the latest stuff, but the web sites seem to assume customers are only interested in promotions. Or are the promotions simply the result of our own self-interest? What percentage of customers click on the promo spots versus hitting the search box or clicking into a department or sub-department? If it’s a fairly small percentage, perhaps a different approach might pay off.

A case study

When we launched the new Borders.com last year, we knew that about half our customers came to the store looking for something new to read without a specific book in mind. As a result, we created the Magic Shelf, a virtual and interactive book shelf that housed up to 120 books in an easily browsed application.
And we placed the Magic Shelf in the most prominent position on our home page — front and center. The decision to offer such valuable real estate to this new feature was hardly unanimous, but those of us who supported it won at least enough support to give it a try.

The result? Not only did customers say they loved it, those who interacted with the Magic Shelf converted at a rate 62% higher than those who didn’t. As we dug deeper, we discovered that the reason they converted more was that they viewed about 41% more products than those who didn’t interact with the Magic Shelf. (If you’re interested in more detail, you can download the case study we did with Allurent, the vendor we used to develop the Magic Shelf).

How might the shopping experience change on an apparel site if there was prominently placed virtual rack of some sort that allowed customers to easily browse, on one page, a wide selection of the latest styles? How about virtual jewelry cases or flower bins?

Ann Taylor trendsetting

The new Ann Taylor site design has made some strong strides towards a nice product browsing experience. While they still seem to feature window signs on the home page, their landing pages provide a very nice browsing experience where customers can easily peruse lots of merchandise. The product images are very clean and easy to see, and the page layout lends itself to the ability to occasionally replace one of the product spots with a visible but unobtrusive promo spot. Bravo to Matthew Seigel and the team at AnnTaylor.com!

I’m not sure it’s necessary to replicate a physical fixture to achieve the benefits of great product browsing. To me, the key is giving customers easy access to our merchandise and letting them very easily view lots of different items. That basic concept is something we discovered long ago in the physical retail world. How did we lose sight of it online?

What do you think? What is the thinking at your company? What sites have you seen that do a good job giving access to the product? Or, are the current methods working for you?


Retail: Shaken Not Stirred by Kevin Ertell


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