Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
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The correlation between ease of finding product and visit success may seem self-evident, but the ratios can vary significantly from department to department. Calculate the sub-category-to-category and product-to-sub-category ratios for each category. Compare these values against the visit success and conversion rates for shoppers in each category. The most unsuccessful categories will have the lowest sub-category-to-category and product-to-sub-category values (typically 0.2 or below).
These poorer performing categories will most likely have problems with hierarchy or terminology. Here are suggestions to improve them:
l Hierarchy problems: Look for structural differences between the best performing categories and the underperformers. For example, if the better performers have fewer sub-categories than the poorer performers, you may be asking shoppers in the poorer performing categories to sort through too many sub-categories. There may be an optimum number for your site that would reflect best practice. Construct your own table like the one in the example and add a column for number of subcategories. Our experience has shown us that this number is typically between 12 and 15 sub-categories per category. See which structure works best for your shoppers by comparing the number of sub-categories to the best product-to-sub-category ratios. If there is a correlation, make this a best practice and enforce it with your merchandisers (or whoever makes the online category management decisions for you).
l Terminology problems: Test your naming conventions. Merchandisers occasionally get too cute in their naming, and in so doing confuse the shopper. Naming conventions that make perfect sense to people within a culture often make little sense to those outside it--the shoppers. This is a situation where third-party testing methodologies bring an essential objectivity to the process. Don`t, as the warning goes, try this at home. A good usability test can certainly identify terminology issues. Through Content Aggregation (a multi-tiered, sophisticated cousin to card sorting) we help identify the categories and sub-categories that should exist and what they should be named. The most important thing is to identify the fact that problems exist--then they can be addressed.
While the conventional wisdom is that online shoppers are on a mission, keep in mind that browsers outnumber searchers. By paying attention to category management and creating a site that meets the needs of the most number of shoppers, you are setting your site up for greater success. The important thing is to (1) measure your category effectiveness, (2) isolate the categories that are underperforming and (3) take action to fix them. That will help make the cash register ring.