March 5, 2004, 12:00 AM

SPONSORED SUPPLEMENT: Web analytics: The key to profitable online retailing

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By interviewing customers, ForeSee can help a retailer understand future behavior and how that anticipated behavior will affect a business. “If 1,000 people come to your site and buy a widget, that doesn’t tell you if they’re going to come back, if they’ll recommend you to others, if they’re coming to the store, if they’ll buy again from you next year, if you met or exceeded their expectations,” Freed says. In fact, ForeSee Results has an agreement with an analytics company to provide combined services so retailers can gain both the measured analytics information and the customer satisfaction information. “Companies are realizing that they need to tie things together,” Freed says. “They’ve been using point solutions and what they need is a global view.”

On-demand offerings

In addition to a broader definition of analytics, another factor in continued growth in the market is the ability of analytics vendors to offer services both as licensed software and on the ASP model, whereby the vendor hosts the application for the retailer. IDC predicts that the two offerings will co-exist in the near term, with ASPs gaining share if retailers have confidence in the security of ASP offerings. “The whole category of on-demand services is exploding,” Schulman says. In fact,  WebSideStory has trademarked the line “on-demand web analytics solutions.” “People do not want to get involved in large enterprise software licensing deals these days,” he says.

In the end, most analytics programs boil down to improving the customer experience so customers take a desired action. And today, that action is not necessarily a sale. It could be any of a number of actions, or even a series of actions. “Users can apply conversion event measurement to anything they want to apply it to—sales, leads, stickiness,” Schulman says. “They need to identify their key site metrics and then tie those to their own definition of a conversion event.”

When that happens, they will have achieved the goal of analytics, Schulman says: “Customer acquisition, conversion and retention.”

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