Do Sweat the small stuff

Not long ago, the operators of e-commerce sites would trumpet major site overhauls with the sort of fanfare that more often greets, say, the year’s new car models rolling off the assembly line in Detroit. A big batch of much-needed site improvements was heralded as a re-launch, frequently accompanied by corporate predictions of Big Things to Come.

But the e-commerce world has turned on its axis a few times since then. Remember Bloomingdales.com? A scant year ago, it was tooting its horn about a site redesign aimed at making a killing online during the upcoming holiday season. By the end of November, when those expectations didn’t materialize, it pulled e-commerce from the site.

Now, web merchants are more circumspect about broadcasting wholesale site redesigns. They’re discovering that small improvements can make big differences, thanks to new tools from a new generation of analytics software that pinpoints web site trouble spots and then validates the effects of change. Where site success was once calculated solely in terms of hits, traffic and other measurements rolled up into server log files, the new analytics tools track shoppers’ paths throughout a site. That yields critical intelligence at the page and even the product level to pinpoint small but specific opportunities for improvement. And the impact of the resulting site alterations is totaled up in higher conversion rates, lower cart abandonment, better uptake on offers—any action for which completion means success.

Conversion rates up 83%

Hewlett-Packard Co.’s web site, for example, has undergone major transformations behind the scenes to integrate Compaq Corp.’s web site following the merger of the two computer companies in May. But it’s been some of the tiniest site alterations that are producing some of the most interesting and immediately measurable results for the combined companies’ web site, HP.com

One of the changes was a site improvement implemented by the former Compaq which was so successful that other parts of the combined site are being evaluated for similar treatment today. With one minor change to its navigation, Compaq increased conversions by 83% and revenues by 25% for accessories to go with the Compaq iPAQ Pocket PC.

To get the lift, Compaq shortened the path between product presentation and the opportunity to buy the products. Analytics software from Keylime Software Inc. flagged an element of navigation that was creating “dispersion” on a page, says Hewlett-Packard director of research and e-testing Seth Romanow. Site visitors who were apparently following the path toward the purchase of iPAQ handheld accessories instead scattered when they reached the accessories page.

Analytics suggested that the navigational pathway was the culprit. Shoppers who were buying iPAQ handhelds would be presented with information about modems, for example, on the iPAQ product page. But when they clicked on a modem to buy it, the site presented shoppers with the whole list of accessories for consideration instead of delivering them directly to the modem, so they could drop it into their shopping cart and then check out.

“By taking that link out and directing people more specifically into the online store for a particular product, we were able to increase conversions and revenue, from a very small change that didn’t create a cost,” Romanow says. Hewlett-Packard is applying the same type of pathway analysis to pages and links throughout its e-commerce site, he adds.

As Hewlett-Packard’s experience underscores, it’s a new game. Server log files until now have been the basis of e-retail metrics. They show numbers but not pathway information, which is key to uncovering web site pile-ups in need of fixing. Now, analytics are providing that level of detail.

In-stock or out?

In January, Finish Line Inc., a retailer of athletic shoes and apparel, signed on with Buystream Inc., a provider of hosted analytics applications. It was the retailer’s first foray beyond log file data into clickstream analysis that follows visitors’ travels through the site. E-commerce director Kent Zimmerman says the tool proved its worth within three months, when Finish Line encountered problems in communicating product availability to customers while integrating a new inventory database that gave it much greater visibility into stock levels across channels.

The problem was not that incorrect information on availability was being given to shoppers, but that it was being presented to them in a way that led some to the wrong conclusions, such as that when a single item they’d placed in the cart was out of stock, all items in the cart were out of stock. “We realized that the wording and the point in time at which we were displaying an inventory availability message to the shopper was creating the wrong impression,” Zimmerman says. By changing the wording and moving it to a more appropriate place in the process, Finish Line reduced its shopping cart abandonment rate significantly, he says, though he won’t disclose numbers.

“There are industry averages on the number of people you’ll lose at any step in the checkout process. If at any given time, you lose more than is normal, that should raise a red flag,” he says. “We saw something that looked like a red flag, and the tool dug into it.”

Zimmerman adds that the reduction in the abandonment rate was immediate, and that the real-time feedback is a major benefit of the new analytics tools. “One of the good things about these analytics packages is that you can measure the effect of changes almost as soon as you make them,” he says. “If you want to make a change that’s going to impact your conversion rate by 0.2%, you have to see the real-time effect. You can’t wait to collect the data for a week and then go back and see if it has any effect, because that’s a very subtle change. We made a small change that we were almost positive would have an effect in reducing our abandonment rate, and the tool showed we were right.”

Camping World Inc. is another merchant who’s found that it doesn’t take a major site overhaul to make a big difference in sales. Using WebCriteria Inc.’s change management tool, Site Analyst, the multi-channel RV accessories retailer improved conversion on its web site by 8.3%, gaining $19,200 in incremental sales in the first week of implementation.

Place shipping upfront

Using the tool to understand visitors’ behavior on the site, Camping World was able to focus specifically on which elements of the site were preventing visitors from completing purchases. Looking at its checkout process, the tool examined how many visitors progressed through each step and analyzed the differences between visitors who completed the purchases and those who abandoned carts. The analysis gave Camping World a clear picture of where visitors were having problems checking out and suggested several reasons why.

The analysis triggered three small changes in the checkout process to address those issues. It showed, for example, a 10% cart abandonment rate among shoppers who reached information on shipping methods, then the final step in the checkout process, so it started providing shipping method


options earlier in the process. Keeping the entire navigation process wrapped around the shopping cart was resulting in too many unintended exits from the shopping process, so Camping World reduced full-site navigation options for visitors already in the shopping cart, while leaving adequate means to return to other areas of the site. Finally, analysis showed that with larger orders, as customers’ shopping cart lists got longer, the Buy button needed to complete the purchase dropped lower on the page and was harder to find, so it raised the button higher.

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Listening is not enough

The tool allowed Camping World to measure the impact of changes at each step. “Before WebCriteria, we did a good job of listening to customers and acting on their requests,” says Camping World vice president of Internet services David Scifres. “Our own metrics could alert us to the fact that site visitors were having trouble reaching their goals, but we had a hard time knowing what specific changes to make that would have the greatest impact on visitor success and the success of Camping World.”

HPshoppping.com, Hewlett-Packard’s stand-alone e-commerce site prior to the combination with Compaq, bumped up conversions by 3.4% with an analytics-driven change on an even smaller scale—the relocation of a button from one side of a page to the other. When WebCriteria’s Site Analyst tool tracked shopper behavior during the checkout process, it found that many shoppers who wanted to increase the quantity of an item they’d placed in their cart simply changed the number. They didn’t notice the second step required to complete the change, an Update Cart button on the left side of the page. This created confusion when attempting to pay, because the additional items shoppers believed they’d ordered didn’t register.

Moving the button to appear on the right side next to the quantity of the item in the cart made it almost impossible to go to the next step without noticing the button and that reduced exits in attempts to update the cart by 26%. The tool also identified confusion over shipping charges, which used to be delivered at the end of the checkout process. That allowed HPshopping.com to validate its hunch that communicating shipping information earlier on would improve conversions.

“Traffic analysis will tell you the most popular paths on the site, but you can’t make any conclusions from that,” says HPshopping.com conversion programs manager Eileen Wong. “WebCriteria allows us to break down visitor activities beyond just the conversion rate and track visitor progress through to checkout.”

Minimizing the back-ups

Similarly, the Babystyle.com site of eStyle Inc. increased sales by 25% when a re-design of the checkout process prompted a higher rate of successful checkouts, eStyle reports. Using clickstream technology from provider Coremetrics Inc., the company analyzed customer behavior during checkout. Among the changes that Babystyle.com adopted were to identify at which stage of checkout the customer is every step of the way, clearly display the Continue Checkout button on every page so customers always know what to do next, repeat shipping information to minimize the number of times the customer uses the Back button, and present shipping charges earlier in the process.

It also integrated the gift-giving function into checkout so customers don’t have to follow a divergent path to give a gift. And it kept all information on one screen so customers don’t have to scroll down. As a result, the number of customers who complete the checkout process rose by a third to 62% from 47%.

“Our clients know that all successful marketing efforts are based on rich profiles of visitor and customer behavior,” says Scott Kauffman, president and CEO of Coremetrics. “They have moved well beyond basic metrics and site hits.”

Though retailers are reporting that analytics-driven fixes to the checkout process are delivering some of the most immediately measurable results, checkout isn’t the only place where analytics can isolate what needs tweaking.

Using the HitBox tool, an outsourced analytics application from provider WebSideStory Inc., Fox Racing Inc., a retailer of sports apparel for the motocross circuit, found a problem right on its home page. The 2-year-old site, the offshoot of a 30-year-old
offline business, has been transactional for e-commerce since May. Data gathered by HitBox showed that of the 2.8 million to 3.6 million visitors who accessed Foxracing.com in 2001, 1.4 million left the site without going any deeper than the home page.

Too heavy

Though the tool didn’t give reasons for the drop-off, web manager Sandy Syrett knew her audience well enough to know why: the page was too heavy and took too long to load. “Our audience is the 14- to 24-year-old male accessing the Internet from a 56K modem at home,” she says. “They are not getting to our site from a broadband connection at work, and they were not waiting for it to load.” The data from HitBox confirmed her hunch and gave her facts she needed to successfully argue for the design of a lighter page. Six weeks into that change, she’s watching the fall-off trend reverse.

Data from HitBox also made a difference in the site’s efforts to recruit newsletter subscribers. Syrett studied the data to determine where on the site visitors were congregating in greatest numbers, and she placed the offer in those locations. Since switching the offer to those locations last fall, subscriptions to the newsletter have quadrupled to 45,000 from 11,000.

At a time when e-commerce companies are conservative in technology investment, ASP or hosted web analytics applications such as the offerings of WebSideStory, Coremetrics, WebCriteria and others are showing up on corporate shopping lists. The total web analytics market, including both licensed software that resides on a company’s own site as well as hosted solutions, has been forecast by most analysts at about $1 billion by 2006. However, sales of hosted solutions are expected to eclipse software sales starting next year, according to IT research firm The Aberdeen Group, because the hosted or ASP model can be implemented faster and costs less upfront than licensing software.

Hosted solutions carry fees that may start as low as a few thousand dollars a month, and rise to an annual $250,000 or more depending on the provider and elements such as the number of page views, the frequency and detail of data updating, and the amount of consulting services a company chooses to buy to wrap around the service.

The evidence is piling up that small changes can make big differences on e-commerce metrics that matter. While multi-channel merchants now also measure web site success by the yardstick of how the online channel affects shoppers’ behavior offline, sites must pull their own weight in sales, as well. In an increasingly competitive online marketplace, small changes that retrieve carts or boost revenues by even a few percentage points are one way to move the needle. And it’s a strategy that’s getting new attention as retailers work harder at capturing more sales from the most promising source: visitors already at their sites.

mary@verticalwebmedia.com