September 13, 2011, 10:29 AM

A conversion boost for online retailers

Nearly two-thirds of surveyed e-retailers report higher conversion rates over the past year.

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Conversion rates improved over the past year for 65% of online retailers, thanks in large part to more e-commerce site testing, improved checkout procedures and other enhancements, according to Forrester Research Inc. and Shop.Org, the online retail division of the industry trade group National Retail Federation.

The groups today released the latest research from “The State of Retailing Online 2011,” with findings based on survey responses from 61 retailers, including merchants that operate stores, sell only on the web, sell via catalogs and the web, and manufacturers selling directly to consumers. This part of the report focused on merchandising, hiring and global sales.

The report puts the typical e-commerce conversion rate at between 2% and 3%, but says that nearly two-thirds of respondents reported higher rates for the past 12 months. That compares with 54% of respondents that reported higher average order values, 48% with higher average order values for repeat customers and 25% reporting fewer shoppers abandoning shopping carts.

For the higher average order values, the report credits automated and manual recommendation tools that suggest products to shoppers. For the boost in higher order values for repeat customers, the report says part of the increase comes from retailers sending more e-mail marketing messages triggered by abandoned shopping carts, along with the inclusion of personalized messages and offers within those e-mails.

On average, respondents reported a 28% growth rate for e-commerce over the past year—the survey ran from June 9 to July 7—with the highest rates reported by web retailers described as medium-sized (38%), by retailers with less than four years of online experience (69%) and by manufacturers selling online (40%).

Among some 80 factors deemed most useful by retailers and manufactures for bringing in more web sales were: Site measurement and analytics tools (76% of respondents found them effective), sales and clearance pages (73%), customer ratings and reviews (68%), enabling site visitors to search by price, brand, new arrivals, colors and other such attributes (64%) and offering multiple product views and other alternative images (58%).

Factors deemed less effective include customer ratings via mobile devices (22%), wish lists and gift registries (22%), daily deals and related online discounts (22%) and side-by-side product comparisons (20%).

In fact, the mobile channel has yet to become a powerful marketing tool, the report suggests, with only 3% of survey respondents reporting that enabling consumers to share shopping lists via mobile devices has proved effective over the past year. Only 3% said that enabling price comparisons via mobile phones was effective, and only 5% gave a thumbs-up to enabling consumers to use their smartphones to scan bar codes to build those shopping lists.

Still, the report urges retailers to pay close attention to mobile shopping. “While mobile and tablet devices are in their early stages, they are growing in popularity,” writes the report’s main author, Forrester analyst Sucharita Mulpuru. In remarks made today at the Shop.Org conference in Boston, she also urges retailers to think about mobile with a view toward tying in different forms of commerce across retail organizations. “Mobile is not just about driving direct-to-consumer sales but about supporting the multichannel organization,” she said.

The report also indicates that U.S. online retailers can improve their global e-commerce capabilities, especially as the relatively weak U.S. dollar makes their products more affordable for many foreign consumers. Few retailers, for instance, have invested in making their e-commerce sites more accessible to foreign consumers by language, as 72% of respondents say they offer only English-language content, and 68% offer customer service only in English. And almost half of respondents, or 49%, said a single team based in the home country manages all international e-commerce sites, while only 6% report having a regional manager to handle local marketing.

Retailers and manufacturers plan to add employees to beef up their e-commerce operations, the report suggests—but most companies, 54%, will boost their e-commerce staffs by less than 10%, not counting fulfillment and customer service. That growth rate is less than e-commerce spending increases recently reported by such organizations as the U.S. Commerce Department and web measurement firm comScore Inc. The report also notes that the average respondent to the survey employed 50 full-time workers dedicated to e-commerce, not counting fulfillment and customer service.

44% of respondents plan to hire more employees for the mobile channel, the report says, while 46% plan to increase the staff focused on web analytics.

 

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