March 21, 2002, 12:00 AM

Online retailers are measuring the wrong things, Forrester says

Forrester Research says e-retailers have to get serious about web site metrics by homing in on stats that relate directly to revenue.


A new report from Boston-based Forrester Research Inc. says e-retailers have to get serious about web site metrics by homing in on stats that relate directly to revenue. Doing so will increase online sales and help quantify web sites’ impact on overall sales, the firm says.

Forrester contends that retailers are using inefficient or, worse, irrelevant tools for measuring site metrics. Out of 30 surveyed retailers, 97% said they measured site traffic and 33% said they measured session length. However, Forrester says both stats are of secondary importance because they’re not directly related to sales or shoppers.

Another problem Forrester cites is that 98% of 50 surveyed multi-channel retailers said they did not know how many of their web site visitors come into their stores to make purchases. Forrester says it’s important for retailers to know who the multi-channel shoppers are because they are the most valuable, as 46% of web buyers research online and buy offline. Out-of-date POS systems, cash-paying customers, lack of universal customer identifiers, privacy concerns and disconnected databases all hinder retailers’ ability to track shoppers across channels, the report says.

To improve evaluation of web site shopping metrics, Forrester suggests that retailers focus on three categories of metrics. They are:

--Basic online metrics--sales figures, average order sizes, conversion rates, cart abandonment rates and repeat purchase rates. --New online metrics--the collection of personal information, common paths taken by profitable customers, detailed conversion rates, customer satisfaction and comparisons to industry peers. --Cross-channel metrics--count activity rates and transactions for the most common cross-channel scenarios such as catalog quick-shop features or in-store e-mail sign-ups.

The reports also says retailers should integrate data from a variety of sources by evaluating and utilizing analytical software and combining that with the human element, such as encouraging store clerks to be up to date about online efforts.


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