But losses mount for the home furnishings e-retailer that went public in October.
When it comes to performance, retailers need to look beyond the numbers and ask, `Am I really meeting customer expectations?`
The one inescapable truth about e-retailing is that if site performance does not meet shoppers’ expectations shoppers will take their business elsewhere, regardless of the strength of the retailer’s brand or how eye-popping a site design may be.
“Consumers have developed certain expectations about e-retailing and if those expectations are not met, consumers will be dissatisfied even if they make a purchase,” says Larry Freed, president and CEO of Foresee Results Inc., which measures online customer satisfaction. “When a consumer expects a quality shopping experience and does not get it, it is only natural they feel disappointed. Consumer perceptions about, and expectations of, an e-retailer are formed with every interaction.”
Even if the failure to meet the shopper’s expectations is the result of a poorly performing outsourcing partner that provides such applications as consumer product reviews, shoppers still will hold the retailer responsible.
“Shoppers don’t care about the complexity of the retailer’s outsourcing arrangements because what they see is the retailer’s brand on the site,” says Matthew Poepsel, vice president of performance strategies for web application management firm Gomez Inc. “Shoppers will hold the retailer responsible for performance at every turn, so it is key that retailers take steps to prevent any type of negative reaction to site performance, whether they are directly responsible for it or not.”
To meet shoppers’ expectations of site performance, retailers need to broaden their approach to defining performance metrics to include measurements that indicate whether they are engaging shoppers in a meaningful way.
“Web sites are becoming richer, using more dynamic content and video; these features have to not only load fast, but perform as expected or they will not engage the shopper,” says Bill Bradley, senior industry marketing manager, commerce for Akamai Technologies Inc., which powers rich media and dynamic transactions online and provides Internet performance management services. “Even if dynamic content loads fast, if it is dated or the link to it is incorrect, it will not engage the shopper and deliver the desired sales lift.”
Tracking metrics that tell whether the shopper is being properly engaged will help e-retailers determine the financial health of their business. Every malfunctioning page link or slow-loading page raises the possibility the shopper may contact a customer service agent for help or worse, abandon the transaction and the retailer all together. That is expensive since the cost of having a service agent handle a customer inquiry is three to five times the cost of self-service through the web site, according to Bradley.
“The aim is to track metrics that measure performance in relation to the cost of the conversion,” says Bradley. “The goal is to deliver the performance shoppers expect while delivering an engaging experience through the lower-cost web channel to keep retailers’ expenses in control.”
Look deep into metrics
Thinking of metrics as a measure of a site’s financial health pushes retailers to consider all the angles of performance, not just the most obvious ones.
“If a retailer can track how much downtime costs and make that metric visible internally, everyone is not only aware of the importance of this metric but will work to manage it better,” Poepsel says. “It is important to not only know which metrics determine whether customer expectations are being met and meeting internal goals for performance, but what the performance metric actually means to the business.”
Indeed, the intent of each shopper logging on to an e-retailing site is different and will vary with each visit. Many shoppers will start by browsing multiple sites to compare prices for a specific item, return at a later date to read customer product reviews and so on until they make their decision to purchase.
“Every metric plays a role in understanding what drives shopper behavior and satisfaction, but retailers don’t always know how to identify these metrics or what they mean,” says Freed.
To illustrate his point, Freed uses the example of a retailer with a 5% conversion rate that launches a search marketing campaign that generates a 4% conversion rate. The natural reaction is to say the campaign is underperforming based on the drop in conversion and to either revamp the campaign or drop it.
“What needs to be considered is the type of shoppers the campaign is attracting. If they are predominately new customers, the conversion rate may be acceptable,” Freed says. “Retailers need to look beyond the numbers in evaluating what a metric is saying.”
Putting performance metrics into perspective begins with getting a baseline measurement of competing sites. Doing so will help retailers set goals for performance and eliminate guesswork about which metrics reflect customer expectations for performance and the financial health of the site.
Baseline metrics include site and transaction availability, speed of page downloads, consistency in the performance of the web site, and if the site renders correctly and performs well with all available web browsers.
“Customers can’t shop if the doors to the site aren’t open; they won’t wait for a slow-moving site,” Poepsel says. “And if the site is incompatible with their browser the retailer is leaving money on the table, which is something they can’t afford, especially in these tough economic times.”
Gomez provides services that test web sites in development and measures and benchmarks them when live through a software as a service model to more than 2,000 customers. Web site and web application performance, as well as the customer’s actual web experience, can be measured from design and development through deployment and production.
The acid test for performance monitoring remains testing. With more companies releasing web browsers to challenge the dominance of Microsoft Corp.’s Internet Explorer-the latest being Google-testing site performance across every available browser is more important than ever because there is no way to be certain which browsers and operating systems shoppers are using.
“More shoppers are coming into e-retailing sites through Firefox, Google Chrome and other browsers,” Poepsel says. “What level of performance a shopper experiences through a browser can depend on whether they log onto a site at work or at home.”