August 9, 2002, 12:00 AM

How Eddie Bauer’s “low-cost web-site laboratory” yields e-retailing profits

Eddie Bauer looks over customers’ shoulders in an in-house tech lab to learn where customers trip while shopping and where they find smooth navigation. Today, nothing goes on the site without running through the lab first.

Like many of the retailers who made presentations at last week’s eTail 2002 conference in Boston, Sally McKenzie, vice president of the e-commerce division at The Spiegel Group’s Eddie Bauer division, focused on improving profitability with web site metrics. But when McKenzie talks metrics, she takes the subject well beyond the more common measurements of average orders, conversion and abandon rates and new vs. repeat web shoppers. In addition to those, she likes to talk about “advanced metrics,” such as personal information capture rates, search-to-buy ratios, most profitable navigation paths, conversion rates for content-to-buy vs. product features-to-buy, merchandise profitability by web placement and abandon rates measured by different shopping experiences.

“Mastering web metrics is not easy,” she told her eTail conference audience, noting that the impact of advanced metrics on web-site design is the key to enhancing the profitability of web merchandising. “Convenience is the number one reason for shopping on the web, which means that you want a site that’s easy to use.”

To that end, Eddie Bauer employs advanced web metrics to achieve what McKenzie calls “customer-centric design.” And just where are designed-oriented metrics developed and tested? “In a low-cost web site lab at our Seattle headquarters,” McKenzie said. At the lab, she explained, “We conduct web site usability studies with actual Eddie Bauer customers who live in the Seattle area. We classify them (by their Internet shopper expertise) as beginner, intermediate and advanced users. A usability analyst logs every task time, and our web designers can see in real time how each user is navigating. It’s a humbling experience, but by far one of the most effective thing we’ve ever done.”

Acting on information obtained in the lab studies, Eddie Bauer undertook a number of design changes to its site, from changes to the navigation bar to placement of merchandise categories, that vastly improved task completion times. Overall, the redesign of the site allowed the lab-based customer focus group to complete a variety of tasks in 14 minutes vs. 21 minutes with the prior design. The lab testing also encouraged Eddie Bauer to invest in adding a buying guide to the site last November that presents comparative product information linked to product pages. Fully 56% of web shoppers now use the guide when shopping on the site, and on average they spend 30% more than non-users of the guide. “Now,” declared McKenzie, “we don’t put anything live on a web page without putting it through the lab’s usability test first.”

In addition to lab-based usability studies, Eddie Bauer carefully monitors information it garners from the ultimate user-the home- and work-based web shopper. “We maintain a database of all customer calls and e-mails (related to web use), and we watch that like a hawk,” McKenzie said. “Customers are extremely vocal about what they like and don’t like about the site. The key is to watch for trends in these comments and to deal first with the big stuff.”

By listening to consumer complaints received by phone and e-mail, Eddie Bauer earlier this year dealt with the company’s number one complaint about its web business-the difficulty customers reported in tracking order status-simply by moving the order status button to the top and center of the navigation bar. Order status complaints did not go away, but they dropped to 12th place on the complaint list. In fact, said McKenzie, as a result of the design changes made in response to usability analysis, complaints about the online channel have entirely disappeared from the top-10 complaint list at Eddie Bauer. But the real impact of these changes has been on the bottom line: the company’s web site recorded record profits last year and will show substantial improvement in profitability again this year, she said.

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