Performance Index: Lessons from the fourth-quarter crucible

February 24, 2014 by Leave a Comment

When it comes to seasonal cycles, most merchants acknowledge that the pivotal fourth quarter requires special focus. The latest data from the MarketLive Performance Index demonstrates that the fourth quarter is indeed a crucible. While traffic spikes and conversion rates get a boost, the ruthless mindset of the holiday shopper leaves no room for error — translating into metrics that reveal top areas for improvement in the year ahead.

Overall, the fourth-quarter and annual metrics in the Index report bring good news: merchants achieved year-over-year revenue gains of 26% for the year and 16% for the fourth quarter — beating industry standards by significant margins in both cases. Moreover, those revenue gains were achieved without resorting to race-to-the-bottom discounting, as average order size for both periods also rose year over year. The feat is especially impressive for the  fourth quarter, when merchants saw average order size rise 6.2% despite consumers’ quests for holiday shopping discounts.

MarketLive Performance Index data

But there are performance discrepancies, too. For the year, a significant increase in the add-to-cart, or engagement, rate helped boost revenue gains; once shoppers had placed items in the cart, merchants held the line on “purchase fallout,” with the conversion, abandoned cart, and abandoned checkout rates holding their gain or loss to within roughly 1% compared with 2012.

By contrast, in the fourth quarter, the boost in revenue was tied more directly to the increase in traffic; conversion and add-to-cart rates increased by almost the same percentage, and those gains were undercut by increases in both the abandoned cart rate and the abandoned checkout rate. Breaking down fourth-quarter results even more to focus on the holiday period (November 1 – Jan. 5), the gap widens further, with the both the add-to-cart and conversion rate slipping year over year, in addition to the abandoned cart rate rising.

MarketLive Performance Index holiday data

The numbers from the fourth-quarter crucible suggest one possible pivot point around which to organizing priorities: the all-important add-to-cart rate, which signals intent on the part of shoppers and whose improvement during the other quarters of the year contrasts with the holiday season, when it declined.

Prior to the add-to-cart: develop content to engage shoppers. When it comes to connecting shoppers with relevant products and content and convincing them to add items to the cart, the annual Index data shows that merchants are making marked improvement. But the holiday numbers suggest that they must redouble their efforts if they’re to compete in the battle for holiday shoppers’ engagement. Among the strategies to consider:

  • Service-centric content. As we discussed in our recent post regarding Google’s “Hummingbird” algorithm update, content that focuses on proactively addressing shoppers’ questions about products, service and pricing is more crucial than ever — and needn’t be relegated to the “about us” section. During the holiday season, when shoppers relentlessly research products and hunt for service extras, this content is even more likely to help drive sales.

  • Videos focusing on utility. Product demonstrations, installation tips, and video buying guides add significant value for shoppers, as we discussed previously in our post covering key video content. During the holidays, videos can give shoppers the reassurance they need to commit to purchasing gifts without first touching or trying them.

After the add-to-cart: eliminate roadblocks to purchase — across touchpoints. While merchants maintained a relatively steady state when it came to conversion, cart abandonment and checkout abandonment the rest of the year, the holiday season saw slippage across all three metrics — suggesting that merchants can do more to compel shoppers who’ve already added items to the cart to complete purchases, whether via the touchpoint where they started their shopping journey or not. Merchants should:

  • Use the cart for more than estimated shipping and tax. More than just a cost calculator, the shopping cart should give consumers comprehensive information to support their order, from product upsells to information about product guarantees, returns and exchanges. Free shipping promotions and loyalty club benefits should also be prominent, giving shoppers a bevy of options to successfully complete their transactions. And the ability to print and save cart items for later smooth the path to purchase from online browsing to offline buying.

  • Consider single-page checkout. While we’ve written before about how no single checkout format dominates among the largest of merchants,  prior Performance Index data suggests single-page checkout is becoming more prevalent among specialty and boutique sellers, with 75% of Index transactions taking place via one-page checkout. Furthermore, a streamlined single-page checkout can provide a viable starting point for mobile implementations, which need to be even more frictionless. Whatever the format, merchants should dive deep into their analytics to ferret out checkout problems across touchpoints and devices, and deploy A/B tests to put potential solutions through their paces.

  • Implement alternative payments. We’ve repeatedly addressed the importance of adopting alternative payments, to enable both desktop and mobile purchasing. Of course merchants should take into consideration their target audience and the prevailing standards for their category — for example, BillMeLater is more of a priority to implement for sellers of big-ticket items such as furniture or jewelry than merchants offering fast-fashion T-shirts — but in all likelihood, offering at least one alternative payment option should be a top priority for 2014.

Download the latest Performance Index report for in-depth metrics, including mobile data and KPIs by vertical, and further strategic recommendations. How do your 2013 metrics compare with the MarketLive Index benchmarks, and how are the numbers influencing your 2014 plans?

Filed under Acquire, Convert & Retain, Analytics Tagged with MarketLive Performance Index

Webinar preview: 2014 trends and “grass-roots commerce”

February 19, 2014 by Leave a Comment

In the day-to-day quest to win sales and customers, it’s easy for online merchants to lose sight of just how fast the industry is moving. But consider what online shopping looked like just five years ago, in the distant era we might call eCommerce 1.0. Web sites were primarily product catalogs, with images and copy often literally pulled from printed materials and reposted. Shoppers discovered these sites either through offline knowledge of the brand or through online search, with merchants using a static set of keywords to ensure their site’s placement high in organic search results. When shoppers found a brand to follow, they signed up for email alerts, received via a program like Outlook on desktop computers. And when they were ready to transact, those shoppers reached for a plastic credit card to enter their payment data, or logged off to purchase the items they sought offline – at the brand’s physical store or at another retailer altogether.

From the vantage point of early 2014, this scenario now seems like a museum piece. In the past half-decade, the monumental changes wrought by surging mobile phone usage, the introduction of a whole new class of tablet devices, and the social media revolution have rendered the eCommerce 1.0 experience wholly obsolete. As consumers have shifted their browsing and buying habits, the traditional “eCommerce funnel” has exploded into a galaxy of connections that provide the opportunity for an unending cycle of interaction between shoppers and brands.

In response, merchants must completely upend their brands – abandoning static, top-down strategies in favor of agile organizations that can respond to changing technologies and shopping behaviors while maintaining a cohesive message across touchpoints. Call it grass-roots commerce, where the consumer’s situation and preferences dictate the shopping experience.

While most merchants recognize the importance of this customer-driven approach, attempts to respond to the rapid changes buffeting the industry can so far best be termed good-faith efforts.  Brands’ mobile offerings attract traffic, but low engagement and sales; social campaigns attract followers, but struggle to achieve ROI; and transitioning among in-store, mobile and desktop activities is clunky at best.

Tomorrow, MarketLive CEO and Founder Ken Burke will present a webinar outlining the top trends influencing online commerce, and examine how merchants can move beyond experimental efforts to achieve mastery in key growth areas for 2014. Specifically, the webinar will address strategies for providing

  • the “what”: content  and offers shoppers want – going beyond catalog copy to provide the information consumers seek to successfully navigate product offerings. By now, many shopping sites offer extensive product content  – rich imaging, zoom, detailed descriptions, features that spotlight exceptional attributes, customer reviews, and product demonstration videos, along with savvy buying guides and expert advice to support the purchase process. To create a customer-driven shopping experience, merchants should build on this solid foundation by presenting shoppers with a tailored mix of products, content and offers that proactively provides the information they need to make purchasing decisions.

  • the “where”: buying wherever shoppers want – enabling shopping, transactions and fulfillment across touchpoints and borders. There’s no way around it: merchants must invest in knitting together to the fullest extent possible information across channels and sites to create a unified brand experience that smoothes the path to purchase, regardless of how circuitous the route shoppers select. While small- to mid-sized merchants are unlikely to have the resources to match the advanced features and functionality of the largest online brands,  every seller can enact common-sense strategies that make the most of what offerings they do have.

Register for the webinar now, and join in tomorrow at 10 a.m. PDT. We look forward to the discussion!

Filed under Acquire, Convert & Retain, Connected Commerce

6 ways to modernize customer reviews for 2014

February 7, 2014 by Leave a Comment

By now, merchants know that customer reviews are an essential component of product content. Reviews are increasingly widespread, with more than 60% of the merchants in Internet Retailer’s list of Top 500 merchants using them.

As a result, the long-standing best practices surrounding reviews, if not universally adopted, are at least well-known — from avoiding censorship of negative reviews (since negative reviews can actually drive sales) to enabling ratings of individual product attributes to using review content in merchandising and marketing.

But the ubiquity of reviews and the increasingly savvy online consumers who consult them require merchants to up their game. Shoppers’ sophistication about review content, as well as their access to mobile technologies and social sharing opportunities, all play a role in the latest best-of-breed implementations. Among the ways to freshen reviews for 2014 and beyond:

Seek reviews, not just star ratings, from those in the know. Shoppers’ disregard of star ratings was among the surprising findings from a 2013 study of more than 18,000 Amazon reviews. Higher sales were associated with products with a mix of high and low ratings, versus those with uniformly negative or positive ratings — again demonstrating the importance of negative reviews. But what shoppers paid attention to most was the review text itself; positive reviews with a more credible linguistic style had more impact than those that displayed no particular expertise about the product or the product category. So to enhance the credibility of their reviews, merchants should encourage submissions from frequent or long-time buyers who are best able to evaluate and compare products.

MarketLive merchant Peruvian Connection makes submission of a detailed review easy by providing helpful tips for content. The review display includes several indicators of a contributor’s knowledge of brand offerings, from a “First Time Customer?” attribute to badges for top contributors.

Review example from Peruvian Connection

Let shoppers “review the review”.  Allowing shoppers to vote on whether a particular contribution was helpful gives merchants a criterion for prioritizing display of reviews, while the ability to comment on reviews enables a dialogue among customers and would-be buyers. And, of course, customer service staff can use the commenting feature to respond to reviews and provide further information.

Summarize with a representative sample of the best reviews. In addition to aggregating and averaging the star ratings, merchants should provide a summary sampling of the most popular comments so that shoppers can quickly scan to get the gist of opinions. The summary should be representative of the entire body of reviews for the product, good and bad, while showcasing the reviews deemed most helpful.

MarketLive merchant Perricone MD provides a review snapshot that includes the most liked positive and negative reviews, along with a list of popular product attributes as indicated by reviewers.

Review example from Perricone MD

Enable multimedia reviews. Since consumers increasingly have a camera and video recorder — in the form of their smartphones — within easy reach, and are increasingly comfortable with posting pictures and video online, merchants should go beyond text-and-ratings reviews to take advantage of this new potential pool of user-generated content. Review submission forms should prominently invite inclusion of photos and video, and review displays should showcase multimedia content. In addition, merchants should allow shoppers to sort and filter reviews according to whether they have images or video, and even consider adding the presence of multimedia reviews as an attribute for guided search alongside star ratings.

Retro-style clothing and home decor merchant ModCloth includes photo submission on its review form, and pictures are displayed alongside review text.

Review example from ModCloth

Syndicate review content across touchpoints. Social media is an ideal platform for sharing product review content, as brand followers are hungry for recommendations from other customers. At the least, merchants should consider featuring “top-rated” products on Facebook and/or Pinterest, and quoting review text aspart of the presentation.

MarketLive merchant Figi’s prominently features a link to product reviews from its main Timeline page on Facebook. The page offers social shoppers the ability to browse featured products and customer favorites, and to submit reviews directly from within Facebook.

Review example from Figi's

Disclose collection methods up-front. Achieving “critical mass” for reviews is crucial to relevance — but so is transparency when it comes to methods of achieving it. Merchants who aggregate reviews from other sites (e.g. Amazon), or who incentivize customers to contribute reviews with contests or prize drawings, should disclose those practices as part of the review display on the product page. Sears includes a line in its review summary noting that some contributors have received benefits in exchange for their submissions — but emphasizes those benefits weren’t conditional based on review content.

Review example from Sears

How are you maximizing the efficacy of customer reviews?

Filed under Acquire, Convert & Retain, Client Innovations, Connected Commerce, Social Commerce Tagged with customer reviews

The mobile medium not to ignore

February 5, 2014 by Leave a Comment

In the quest for mobile competence we identified as a top 2014 priority, it’s tempting to focus on tablet marketing techniques and branded apps as the solution for driving mobile consumer engagement. But merchants would do well to consider a humbler, but no less potentially effective, avenue for reaching shoppers: the text message.

For starts, developing an SMS service can help merchants reach the broadest possible mobile audience. Fully , compared with 60% who browse the Internet on their devices and 50% who download apps, the Pew Internet & American Life Project found.

This near-universal usage extends globally, and even to those using the most sophisticated mobile phones; in Europe, for example, 90% of consumers armed with an iPhone still report using text-messaging frequently, according to technology researcher Forrester.

Finally, the inter-operability of text messaging across wireless carriers and device types means that launching an SMS service requires less of a technology investment than developing — and maintaining — smartphone apps on several mobile operating systems.

Perhaps because of these potential benefits, just over half of merchants report that they’re either using SMS campaigns now or plan to do so this year, according to a recent survey from Exact Target. Of the 26% of merchants currently using SMS services, more than half report “excellent” results for a variety of campaigns, from “welcome” routines for new subscribers to holiday messaging.

So while merchants should attune their mobile strategies to their target audiences, SMS campaigns should almost always be part of the mix. To successfully craft an SMS strategy and develop campaigns, merchants should:

Start with a foundation of ethical practices. While text messaging can potentially provide effective, broad mobile reach, its unique medium and format require merchants to exercise caution and create messaging that conforms to common standards. Among them:

  • Following industry guidelines for opt-in and opt-out. The Mobile Marketing Association’s guidelines describe how to give consumers maximum control over their SMS subscription — essential given that, depending on the wireless plan, a per-message fee might apply. For starts, merchants should institute a double-opt-in routine for new subscribers and include opt-out information with every message.

  • Treading lightly when it comes to frequency and scheduling. Because text messaging is not only a one-to-one medium, but an immediate one — with 90% of text messages being read within 3 minutes, by some counts — merchants should exercise caution with the timing of their messages. For example, overnight hours are to be avoided for delivering text messages, since many consumers sleep near their phones and might not take kindly to receiving promotional materials in the dead of night.

Think beyond contests when it comes to content. While “text to win”-style sweepstakes are commonplace, they’re only the tip of the iceberg when it comes to the ways merchants can engage consumers via text messaging. Among the contenders:

  • Limited-time alerts. With the popularity of daily deals and “flash sales” continuing to rise, merchants can capitalize on the immediacy of SMS messaging to deliver exclusive, limited-time offers. Macy’s messaged SMS subscribers in synch with a network television show, letting them know they could shop looks featured on the show

SMS campaign example from Macy's

  • Post-purchase notifications, including replenishment reminders. Delivering  shipping status notifications and reminders to reorder to mobile devices ups convenience and encourages them to re-engage with the brand on the go.

  • In-store purchase support. SMS can be a viable alternative to QR codes for giving shoppers in physical outlets quick access to further product information online, such as buying guides or customer reviews. And with mobile coupons enjoying a redemption rate of 10%, compared with paper coupons at 1%, SMS links to mobile coupons for immedate use can connect shoppers with the discounts they seek.

Promote — and differentiate — SMS availability everywhere. Once they’ve developed an SMS service, merchants should be sure to promote it prominently — and to detail how messages will complement, not duplicate, existing options for staying in touch with the brand, such as email updates or social media. Among the locations to consider:

  • The eCommerce site. Merchants should let desktop and laptop shoppers know that they have an option to connect with the brand beyond browsing the mobile web.

  • The mobile Web site. While it may seem redundant, the option to receive incoming “push” alerts  means consumers on the go don’t need to remember to keep checking the mobile Web site. Saks Fifth Avenue recently gave SMS alerts pride of place on the mobile home page.

SMS promotion example from Saks Fifth Avenue

  • In stores. Merchants should use store displays to promote the benefits of staying connected via SMS. Ace Hardware emphasizes the exclusive nature of the discounts offered by SMS with a “Mobile Only Offers” banner on signage. The point-of-sale signage includes examples of discounts available via the SMS program.

SMS promotion example from Ace

How are you incorporating SMS into your mobile strategy?

Filed under Connected Commerce, Mobile Commerce

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