March 31, 2006, 12:00 AM

Keeping Track

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Over many years, traditional retailers have developed a wide range of sales-related incentives and other programs to encourage offline store appeal, customer loyalty, higher average orders, repeat business, word of mouth referrals and so on. Warranties, discount coupons, gift certificates, customer services and seasonal specials are among these popular techniques. Many retailers often focus on the effectiveness of the buying process, to the detriment of the other business processes that the web site supports. Today leading retailers use comprehensive testing methodologies that go well beyond the front door of the home page. They can test every important business function on the site; for example, whether the store locator works as expected, whether gift certificates can be redeemed with ease, and whether product warranty language is accessible online. Modern e-retail environments do much more than bring in top line revenue; they feature many end-user capabilities that can save retailers money. All of these processes must be managed with a critical eye toward their performance.

5. Keep third parties honest

Few online retailers, even the biggest ones, deliver their entire online store on their own. Third party providers generate advertising, produce virtual models, manage credit card payments, and perform other functions. All too often, it is assumed these operations are efficiently and seamlessly bolted into the customer’s browser. Many online retailers have yet to put these functions to the performance test. That’s why there’s such a tremendous reliance today upon Service Level Agreements. But without monitoring and tests, an online retailer can’t know whether third party partners are performing well. Some e-retailers find out how poorly their performing partners are doing when customers complain-and at that point it’s too late.

6. Seek internal alignment

Product line marketing managers, webmasters, interactive programmers, traditional information technology professionals and operations executives don’t necessarily share a common language or a set of shared beliefs. On the surface, some would argue that they have departmental imperatives and incentives to favor certain behaviors. But when it comes to an online retail presence, these silos can result in a communications disconnect that takes a tremendous toll on a site’s principal goal of providing the best-possible customer experience. One example: marketers love to show large images of the newest products or promotions. Operations teams grumble over ballooning page weights. Few things can do as much damage to a site’s responsiveness and visitor experience as misalignment between design and delivery. Leading online retail organizations create shared performance metrics that align every group around end-user goals and considerations.

7. Take a geography lesson

It is considered very bad in traditional retail when a shopper’s experience in a store on the East Coast is significantly different from the experience of a shopper in San Francisco. The same is true of the online experience. But many e-retailers don’t realize how different their web site experience can be for far flung users. Worse yet, others feel that this is an unadressable problem related to distance and that the inevitable latency and data packet are just too bad. Fortunately, that’s not entirely true. Testing can determine whether data center redistribution, data aggregation, content delivery networks, and additional site optimization-among many other things-can shrink those geographic differences. Retailers shouldn’t let geographical performance issues lead to lower conversion rates for remote shoppers.

8. Link application performance to business performance

Intuitively we know high-speed, highly available online retail web sites are good for business. We also know that slow, inaccessible sites are not good for business. But many people don’t know or don’t quantify just how bad for business these conditions can be. Beyond a dip in online sales as punishment for bad performance, costs can increase with additional volumes in the call center; channel switching can erode margins; alternate channel efforts and other programs and problems can crop up when a site is not optimized. Leading retailers connect the dots and make informed decisions about the experiences they deliver for maximum result.

9. Manage change aggressively

What do traditional retailers do when same store sales decline quarter over quarter? They investigate, make a change, and then test to see if the change worked. It’s the same with online retail sites except changes online can be tested well before they go live. Aggressive online retail operations use continuous metrics that help isolate potential problems, make changes, measure the effect of those changes in advance, go live with the appropriate choices, and then validate that these alterations are having the desired outcome. They gain confidence in the positive change for online shoppers before placing the new shopping experience at risk.

10. Evolve the metrics over time

Online site measurement and management is no more a one time thing than physical exercise. Online retail health hinges on ongoing checks, constant tunings, and vigilance to guarantee that as users evolve, the site evolves in lockstep. A retailer who is brand new to online performance can follow a progressive, predictable path. First make sure the lights are on …site availability. Next, confirm that the checkout lines are short …site response time. Finally, ensure that the experience is consistent. Focus first on increasing application performance to serve the top line and then increase manageability of the online store to serve the bottom line.

The good news is that e-retailers who routinely monitor and benchmark their online experiences suffer from fewer costly disasters. Those who make the transition have a strategic advantage when they put a portion of that firefighting budget to better use.


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