April 28, 2006, 12:00 AM

What your web site can tell you

Web analytics have become an integral part of retailers’ marketing and merchandising strategies

When it comes to web analytics, there is no shortage of measurements retailers can take to understand how their site is performing. On average, most retailers track hundreds of metrics daily, weekly and monthly. All this data helps them understand how and why browsers convert to buyers, which portions of their site or promotions are working effectively and which are not.

Sifting through such vast amounts of information can be mind numbing. Even more daunting is knowing how much weight to put behind each measurement and how to put the data into context. In other words, it’s easy for retailers to identify which performance characteristics to track, but not necessarily how to interpret the resulting data and know what to do with it.

Retailers agree that knowing which metrics to track and how much weight to give each one comes down to a very simple premise: understanding what they want to accomplish when it comes to site performance.

“It’s not just a matter of knowing what visitors do on your site and how they behaved once they got there, but understanding how that information can be used to pinpoint problems, improve performance, even for what works, and generate more revenue,” says Richard Calentine, Internet analyst for Baseball Express Inc., which sells baseball equipment on the web.

While performance goals will vary by retailer, making a list and prioritizing goals can aid retailers tremendously when it comes to working with analytics vendors to identify the necessary metrics. Retailers can also be well served by regularly reviewing the order in which they prioritize their performance goals as they are likely to vary by season. Retailers must also keep in mind that too many metrics can lead to information overload, which slows response time to potential problems or in capitalizing further on a current success, resulting in missed sales.

Following are 10 key areas of performance measurement that most retailers have-or should have-at the top of their lists, and the insights the data gleaned from those metrics can provide.

1. Study Site Search Results-and Non-Results

Examining what shoppers are looking for-and finding and not finding-may seem like a no-brainer, but the truth is that the words consumers use to search for a product ebb and flow. As a result, retailers lose a lot of sales because consumers can’t find what they want based on use of a search word not in the retailer’s dictionary. One way to remedy the problem is to track searches that turn up no results, a.k.a. 0% search.

As part of a recent site relaunch, BaseballExpress.com overhauled its search dictionary to include weight differentials for bats, a description many customers used in their site searches. The payoff was about a 50% drop in 0% searches. “If you can’t get people to the product for which they are looking, they are not going to buy,” says Calentine, who adds he expects conversion rates on those searches to be up substantially as well.

Retailers can also use 0% searches to determine if they need to add a frequently searched product to their inventory or more simply, whether they need to add a new term to their search dictionary. Site search can even be tweaked to return like items, in lieu of not carrying the actual item, which increases the chances of keeping the customer on the site and converting the sale. The savviest retailers can cut deals with competitors to return a referral link for a non-inventoried item in exchange for a finders fee.

“Site search is also a merchandising tool,” says Warren Raisch, senior vice president of analytics vendor WebSideStory Inc. “People who use site search convert, on average, at a 3% higher rate than customers using standard navigation tools. There is no reason not to make use of the merchandising capabilities of site search.”

2. Optimize the Home Sweet Home Page

Possibly the most valuable piece of promotional real estate retailers own, the home page is not a place to let poor converting elements linger for long. Still, it’s not enough to identify a poor converting space-retailers are best served if they can determine the actual revenue of each element.

“That means looking beyond the click rate to see the average revenue on a per-click basis,” explains Matt Belkin, vice president, Best Practices Group for Omniture Inc. “Once retailers see that, they can surgically cut poor performing elements, figure out what lags and if it’s worth fixing, or figure out what works and promote it.”

These metrics can be especially helpful to retailers that stock seasonal items. HaleGroves.com wastes little time on certain varieties of fruit as they come to the end of their season and switches to Hot Sellers for the incoming season. The same is true for post-Christmas shopping when focus on the home page shifts from gift packages to seasonal varieties. “Home page optimization comes down to conversion rates,” says Paul Lazorisak, director of marketing for Hale Groves Inc., a multi-channel retailer of fruit. “You want elements and promotions that generate good click-through rates.”

3. Know What Works on Landing Pages

It makes no sense for retailers to pay attention to optimizing their home pages if they won’t create custom landing pages. More than half of customers will land at a retailer’s site either through a search engine, banner ad, e-mail promotion or affiliate marketing partner. It makes sense then for retailers to create landing pages designed to appeal to these customer’s preferences for product presentation and branding based on the vehicle used to transport them to the site.

Analytics can tell the retailer who comes directly into a landing page and who they are likely to be. “Landing pages ought to speak to the persona of the customer,” says WebSideStory’s Raisch. “When that is achieved, retailers can feed customers the right information at the right time. It’s about moving away from a feel of what the customer wants and using more science.”

BaseballExpress.com customizes the product on its landing pages linked to affiliates based on the audience attracted by the affiliate. “Several of our affiliate partners are Little League organizations, so we will customize the product selection for that segment,” says Baseball Express’s Calentine. “One of the reasons we redesigned our site was to be able to provide a more personalized experience.”

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