April 18, 2003, 12:00 AM

Many e-retailers still don’t understand basic metrics of their sites

According to The E-Tailing Group’s “The Merchant Speaks” survey, 14% of online merchants cannot identify their conversion rates and 43% don’t know how many customers abandon their shopping carts.

E-retailing has become more sophisticated since its birth eight years ago, but many online retailers still don’t have a clear view of all that’s happening at their sites, says a new survey of 200 merchants from Chicago-based consultants The E-Tailing Group Inc. According to The E-Tailing Group’s “The Merchant Speaks” survey, 14% of online merchants cannot identify their conversion rates and 43% don’t know how many customers abandon their shopping carts.

“People don’t know enough information to drive their business,” says Lauren Freedman, president. “”It’s a big frustration, especially to catalogers. One cataloger told us, ‘We’d never run our catalog this way.”

The problem arises from retailers’ initial focus on building sites and moving product rather than measuring metrics, the lack of measurement technology at the time the sites were being built and, today, the lack of resources to invest in measurement technology that has become available in the last few years, Freedman says. It’s not just a matter of money to buy the technology, she says. “People told us they don’t have the infrastructure to deal with analyzing the metrics,” Freedman says. “They told us: ‘We’d love to have this technology but we don’t have anybody to do anything with the information once we get it.’ You have to have people to analyze the analytics.”

The survey also reports that for 2003, retailers’ top technology initiatives are: platform Improvements, both new servers and upgrades; order processing, including order management, history, invoicing and confirmations; and performance enhancements, such as site look and feel, page redesign and navigation.

In addition to finding the resources to invest in new technologies, retailers said their biggest challenges were breaking down fiefdoms in creating true multi-channel retailing, prioritizing technology investments, using the web to create brands and creating a strategic plan. “We’re in a very ROI-centric culture,” Freedman says. “A retailer who spends $250,000 on a tool wants to know that the return on it will be at the level they expect to get returns throughout the company.”

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