As part of a plan to cut costs by $500 million, Staples says it plans to close up to 225 North American stores by ...
The Missing Metric
Site usability translates directly into sales, says Jeff Schueler, president of Usability Sciences Corp.
Here’s an example all retailers can learn from: Managers of the Internet operation of a national retail chain were having a hard time getting their budget increased because the site was converting only 1% of visitors to buyers and senior executives of the parent weren’t convinced the web site was producing a return. Seeking to justify their operation, web managers implemented a measurement system to figure out how their web shoppers were using the site and what it meant in sales.
The astounding results: Unbeknownst to management, the web site was driving $12 million a month in sales to the stores and had the potential to drive more than twice that amount. Not surprisingly, executives’ attitudes toward the site underwent a dramatic change. Budgets have been freed up. They now realize that the most important visitor, in terms of overall ROI to the corporation, is the visitor who comes to gather information or comparison shop, and they are focused on ensuring those shoppers’ success.
That example underscores one of the new realities of web-based retailing: Internet retailers who focus only on satisfaction surveys or abandoned shopping carts are missing the boat. The key metric in determining how effectively an e-retail site executes its mission is visit success. And how does a retailer define success? The only real answer to that question has to be: the way the customer defines it. Success is not measured only in terms of whether the customer takes some action that the retailer wants her to take. A visit is successful if the customer accomplishes what the customer set out to accomplish.
Customer intent is all-important because purchasing is a process made up of phases, and intent differs by phase. Before shoppers buy, they generally gather information and compare options. Usability Sciences’ data indicate that only 14% of retailing web site visitors arrive with the stated intent to buy. More than three times that number, however, arrive with the intent to gather information (47%), and 24% say they come to price or comparison shop. A whopping 71% of e-retail site visitors do not come with the intention of buying. They’re investigating.
These shopping phases are sequential, so people who are unsuccessful in gathering information on a site are unlikely to graduate into comparison shoppers. People who fail at comparison-shopping are unlikely to make the transition to buyers.
These data support the fact that the Internet is becoming an increasingly integral part of the consumer shopping process. Consumers are coming online to do the initial investigation of purchases because what could take hours in the brick-and-mortar world takes minutes online. The important realization for Internet retailers is that if consumers fail in this initial online investigation, they are much less likely to convert to customers either online or offline. Success in this initial step of the purchase process has a huge effect on conversion.
Usability Sciences’ data illustrate how dramatically this failure can affect qualified buyers coming to a site. 85% of information gatherers and comparison shoppers who succeed in these preliminary phases report that they are likely to return to the site. Only 63% of information gatherers and comparison shoppers who were unsuccessful report that they are likely to return. Failure to meet the needs of those who arrive as information gatherers and comparison shoppers, therefore, means that 37% of visitors are likely never to come back as buyers.
The message for Internet retailers is that they need to be focused not just on sales conversion rates but also on the broader picture of why visitors come to the site and whether they are successful in their stated intent.
Listening to the visitor
Kohls.com launched a measurement project in the fourth quarter of 2002 to quantify visitor demographics, visit intent, visit success, and the impact of the site on brand affinity. One of the significant learnings from the study was that the site’s search functionality was not performing up to visitor expectations. Visitors who repeatedly searched reported visit failure at a rate 46% higher than the general site population.
“Based on the measurement results,” says Kohl’s vice president of e-commerce Terry Rowinski, “we knew we had to enhance how our search results are returned to the consumer. We made the search results more specific for users so they could find exactly what they were looking for by category, brand, color or size. Because we undertook a site measurement strategy, we were able to identify and quantify our shortcomings and take direct action to address them.”
Kohl’s bolstered its primary search function with this four-part sort function then gave it even more muscle by implementing a parametric search capability within the result. In doing so, Kohl’s enhanced the effectiveness of the search function and its impact on visit success for all visitor groups.
In the case of the multi-channel retailer whose web site was driving $12 million a month in offline sales, the site was evaluated on online sales and profitability. Without evidence of sales volume improvement, budgets were frozen.
Site management implemented a measurement system to quantify demographics, visitor intent, visit success, and next intended action, tied into content value and pathing metrics. Management discovered that 26% of the site’s visitors used the site only as an information resource and then went to the store to buy. This segment had no intention of purchasing online, but the site experience exerted great influence on the eventual purchase decision. Data revealed the site was in fact doing a very effective job of meeting the needs of customers who wanted to research online but buy at a store. This group reported a 67% success rate.