January 4, 2006, 12:00 AM

The Secret Sauce

(Page 2 of 3)

Directed shoppers visit web sites with products and brands in mind; often with a catalog in hand to take advantage of quick order capabilities. Examples of these kinds of shoppers include a man looking for Valentine’s Day flowers for his wife two days before the holiday, a mother looking to buy a specific book for her daughter, or a woman looking to buy the latest Keen sandals for a camping trip. Another direct approach might be a future mother-in-law shopping for a shower gift for a bride. She will be selecting from a pre-established registry and only needs to factor in her budget prior to making a final selection and checking out. The common thread among these shoppers is that they are qualified, ready to purchase, and need little information in support of their quest.

Information seekers typically require more information before making a final buying decision. They may shop your site multiple times before finalizing a purchase or they may be multi-channel customers who finish their purchases at retail. As charted from the EMC2 study we conducted last holiday season, this customer is typically found in more information-intensive category such as computers, appliances, furniture, and home electronics.

Their likelihood to buy is stronger than the browser’s where the biggest questions are through which channel they will purchase and the timing of their purchase.

Multi-channel shoppers have a keen interest in shopping most conveniently. Fortunately, convenience comes in a variety of forms, many of which have shown promise from the perspective of multi-channel conversion including in-store pick-up and returns, in-store lookup plus the catalog standards of quick-order and shop-the-catalog.

The importance of multi-channel shoppers became evident in the results of Dieringer Research Group’s American Interactive Survey in 2004, which showed consumers spent $180.7 billion offline on products that were influenced by online research, representing a 31% year-over-year growth. This same study also concluded that for every consumer dollar spent directly online, at least $1.70 was spent offline after doing online research. Given online’s 2005 projection of 7.7% penetration of retail sales, according to The State of Retailing Online 8.0 by Forrester/Shop.org, this will long be a key part of the web’s vital role in driving retail.

These web-previewing consumers are an abandonment statistic waiting to happen, yet from a brand perspective they are critical to achieving corporate goals. Another upside to this situation is a finding from Forrester/Shop.org that 40% of customers who picked up in-store made an additional in-store purchase.

Asked to select his top conversion tactic, Mark Duff, director web strategy at REI, responded that in-store pick up of online orders has been a huge conversion driver. “It’s a well-known phenomenon. Offer to save someone $10 on shipping, and conversion goes through the roof,” he says. REI offers free shipping to stores. “Cart abandonment rates for folks who choose our in-store delivery option are significantly lower than for folks who select standard shipping. And we use regular replenishment trucks to get these items to our stores today. The power-and popularity-of this service continues to amaze me.”

Merchants are also beginning to embrace multi-channel selling through inventory lookup, for instance at Talbots.com, where shoppers express their channel preferences and the web facilitates those desires.

Talbots’ StyleSearch Feature, available on key products, has received a great deal of attention since its 2005 launch and use has far exceeded expectations, according to Cathy Cormier, director of online and database marketing at Talbots. It’s been embraced by the web and store organizations alike, as a coordinated effort is required to achieve success. Managers have observed that more people are coming to the stores than have actually reserved product online-meaning that many are using the tool simply to see what’s available without always taking the added step of reserving it. For Talbots, where taking care of the customer has always been a high priority, this is just another way to service the multi-channel shopper; one that will likely find other apparel merchants following suit.

In addition to the three kinds of customers, there will always be browsers who, by nature, are looking around and thus require a great deal more temptation. They are also more likely to be price shoppers and may be site jumpers merely seeking out the best price. Merchants can use a variety of tools and tactics to inspire this shopper set, causing them to take a chance and convert on your site. They typically include established as well as promotional tactics, driven by the mindset of the brand.

On the generic side are traditional tactics long favored by merchants from featured items to seasonal promotions. Of course, many tend to be category or brand-specific. For example, for apparel sellers, size guides will assist shoppers in selecting the right product while shop-by-outfit can be instrumental in fostering a multiple unit purchase that derives an increased average order. The depth and breadth of merchandising and marketing tools being offered on sites has grown exponentially with increased cross-channel integration, resulting in more compelling customer experiences.

Back to the basics

The melding of channels is certainly evident with greater use of traditional, back-to-basics tactics online. In 2005 a What’s New category was implemented on 82% of the sites and valued by 78% vs. 69% the prior year. “It’s all about the edit,” says CDW Corp.’s vice president of strategic marketing Fred Neil. “We do the edit for the customer. People want to be told what to do.” And telling people about top sellers does just that. “Top sellers are stronger than ever and we’re working to get them above the fold more,” says Brad Wolansky, director of e-commerce at The Orvis Co. Inc.

Lego has found that similar tactics work well for toys where what’s hot and what’s new are updated hourly on the home page for 19 countries. Loyal fans are especially interested in this area as evidenced by the fact that it’s been a very powerful tool in promoting conversions.

Sale, like search, was a universal winner and I certainly heard commentary along the lines of “anything free works.” As one merchant brilliantly recognized, “You can learn to drive high conversion; the best one is free including free trial period; but it’s really about driving profitable conversion. Free shipping outdoes 25-30% off.” It’s the mindset of many online shoppers, according to one department store merchant. Concurring was another niche cataloger who reported, “A free shipping pop-up on the home page or onsite increases conversion by a few percentage points.” That particular merchant uses dynamic pop-ups based on source code.

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