Yes, said ChannelAdvisor CEO Scot Wingo this morning in his keynote address at the annual ChannelAdvisor Catalyst conference in Las Vegas.
Why some retailers like wish lists, which aren’t just for gift-giving any more
Wish lists are making some online retailers’ dreams come true with sales and marketing information.
Think wish lists are just for people giving gifts? Think again. Books On Tape Inc. installed a wish list on its web site and today is getting 10 orders a day from the wish lists-orders it thinks it otherwise might have lost. And most are coming from the customers who created the list.
Online shoppers are increasingly using wish lists as reminders of what they were interested in but didn’t want to-or couldn’t-buy at the time. “People have limited money they want to spend at one time on books. Having a wish list gives them a way to store the titles they want,” says Kevin Coon, webmaster for Newport Beach, Calif.-based Booksontape.com, which installed a wish list on its web site in April 2000 with vendor WishList.com Inc. Those 10 orders represent nearly 3% of Booksontape.com’s daily sales. “It’s important to us because we want people to remember and we don’t want to lose any potential sales,” Coon says.
4 million users
Today, about 5% of U.S. Internet users-about 4 million people-have set up wish lists online, according to the Pew Internet & American Life study by The Pew Research Center for People and the Press. The Pew study, which conducted telephone surveys with 3,500 consumers, says wish lists are a competitive necessity as more consumers come online and the ones who are experienced users begin to utilize web site features more often. “It’s certainly a tool that retailers will find useful,” says Lee Rainie, director of the Pew Internet and American Life study. “Wish lists are something that an increasing number of people will feel comfortable with because the big attribute of the Internet is its convenience. The more the experience is made easy, the more people will do it, and the more the retailer will want it.”
Retailers are finding that wish lists accomplish a lot of marketing tasks: acquiring customers, driving repeat business, generating higher sales, creating an incentive for more visits, reducing abandoned shopping carts and even collecting marketing information.
Wish lists reduce the number of abandoned shopping carts by giving shoppers a place to store items they may want to purchase later. Meanwhile, they establish a mainline between the customer and the retailer by enabling retailers to personalize marketing deals based on wish list items. Wish lists also can provide merchants with critical demographic information that can be used for future target marketing. Wish lists are the best way to get a sale from a customer who is not going to purchase something right away: “You don’t lose on that sale if it’s in the wish list,” says Greg Pulsifer, MuseumShop.com’s business development manager. “And you can still maintain customer information and use that to market to those people in the future.”
The impulse buy
Companies such as WishList.com, WishClick Inc., and CloudPop Inc. all provide wish list systems for retailers, while online giants like CDNow Online Inc. use proprietary technology. And these players are seeing first hand that wish lists attract customers. “We see merchants with anywhere from 15% to 25% of their new customers coming from wish lists,” says Ken Goldberg, president and CEO of CloudPop. And they bring repeat customers because consumers shop at sites where they have lists. “They are a terrific driver of repeat visits,” says WishClick President Scott Sangster.
With all these factors combined, the bottom line with wish lists is really the top line: they can help sell more goods. Just like impulse items help raise sales at the checkout counter, remembering to pick up items in a wish list can boost the average ticket. Sangster cites an apparel retailer whose transaction values go 300% higher when customers use the wish list. And Goldberg says customers’ wish lists can increase sales by 5% throughout the year and 10% to 15% during the holiday shopping season because creators of the wish list direct gift buyers to the list.
But more importantly, not only do wish lists drive to the site shoppers who want to buy a gift for the creator of the list, they also keep the products in the minds of the lists’ owners, making it more likely that they will buy the products at some point, Goldberg says. “As an example, you see a camcorder that you would love to have but you can’t spend the money on it now,” he says. “Odds are you may never go back to that web site to buy it later. There are too many options like physical stores and other online stores. So, with a wish list, there is more stickiness. The customer is more likely to let others know about the wish list and someone else will buy the product for him or her. Or the customer will return to the wish list six months later and say ‘I just got my bonus, now I’ll buy it.’ If they did not have the wish list, they would more than likely buy it somewhere else at that point.”
Another benefit of wish lists is that consumers use them to store items they want instead of creating then abandoning shopping carts. MuseumShop.com’s rate of abandoned shopping carts has dropped from 98% to 95% since the site implemented CloudPop’s wish list software in December, says Pulsifer. MuseumShop.com installed the system specifically to give shoppers a place to store goods they weren’t ready to buy.
But as valuable as saving and increasing sales are, wish lists also provide rich data that merchants can use for future target marketing, Goldberg says. “We can provide retailers a data feed that tells them what items are on consumers’ wish lists. The data feed can plug into a retailer’s marketing tools and retailers can send customers targeted e-mails about what’s on their lists,” he explains. Retailers agree that if they can find out what consumers like they can use that information to sell more to them. Clearly, no other feature is as useful in determining what consumers want than a wish list.