January 20, 2005, 12:00 AM

Retailers devise strategies for leveraging broadband web access

The move by consumers to broadband supports innovative web site merchandising, but retailers should consider how this trend could alienate some existing customers, Steve Duchelle, vice president of web channels at RadioShack, said at Shop.org this week.

 

More than half of online shoppers now have broadband Internet access in their homes, supporting more innovative web site merchandising with bandwidth-absorbing rich media. But retailers should still take a hard look at how rich media can help-or hurt-levels of customer activity and satisfaction, Steve Duchelle, vice president of web channels at RadioShack Corp., and other experts said during a session on broadband at Shop.org this week. “We need to put the consumer in control,” Duchelle said.

Residential broadband web access surpassed 50% of U.S. homes in July, rising to 55% last month, said Ken Cassar, director of strategic analysis for Nielsen/NetRatings, who introduced the session, “Preparing for the Broadband Explosion.”

As broadband connects more homes to the web, it’s also expanding the range of peak online shopping activity. Instead of seeing a single peak on Mondays during office lunch periods, when consumers with home dial-up access use office broadband connections to shop online for something they saw advertised on the weekend, retailers are beginning to see additional daily surges of activity 7-10 p.m., as consumers with broadband access at home shop online after having dinner and getting their children off to bed, Duchelle said.

But broadband also presents retailers with the challenge of how to serve consumers who are still on narrowband. “77% of RadioShack customers are broadband users, but we don’t want to alienate our narrowband users,” Duchelle said.

RadioShack, a retailer known for offering detailed information on high-tech consumer electronics products both in its stores and on its web site, sees an opportunity to improve the web as a consumer-education tool with video demonstrations and other forms of rich media that require high levels of bandwidth. “It’s nice to be able rotate a DVD player to see how many jacks are in the back,” Duchelle said.

But RadioShack is also taking steps to assure that it’s serving its customers interests. It’s surveying customers to find out what they expect in online product displays and demonstrations, and it’s using web analytics tools to test how consumers react to the presentation of rich media displays.

For example, it will experiment with rich media displays of digital cameras that support the viewing of camera features and provide extensive information on how they work, and then analyze how the displays affected shopping activity among narrowband as well as broadband customers. In some cases, Cassar added, retailers give narrowband consumers the option to click a button to bypass a rich media display to get to more static information, but retailers should then analyze whether such detours result in higher abandonment rates.

Cassar noted that are many variables to consider in figuring broadband’s and rich media’s impact on online shopping activity. While online pureplay Buy.com gets 90% of its spending from broadband users, for instance, there are individual product categories, such as jewelry and watches, that get more spending from narrowband users, Cassar said.

Research also shows a slight variation in the sales conversion rates of broadband and narrowband users, depending on whether conversion rates are measured against monthly or per-session shopping activity. The monthly conversion rates for broadband shoppers averages 26.1%, compared to 21.2% for narrowband users, but narrowband users show a slightly higher average per-session conversion rate, 2.7%, up from 2.5% for broadband users. Cassar suggested that narrowband users may be more likely to complete a purchase because it narrowband requires more time and effort to conduct a shopping session.

 

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