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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For example, during winter shoppers logging onto the site of a home improvement retailer in a part of the country that was hit by a major snowstorm can be shown snow blowers, while those outside the area of the storm see something else.
“Retailers continue to look for ways to leverage shopper information at the micro and macro level to deliver more personalized and relevant products and advertising,” says Akamai’s Santos. “Greater precision in content placement yields more relevancy and delivers retailers a higher return on their investment.”
Applying personalization to e-mail marketing campaigns, which merchants tend to treat as a mass marketing tool, can dramatically boost click-through rates. An e-mail with personalized recommendations can generate click-through rates three to 10 times higher than standard e-mail campaigns, according to Cell.
“A lot of retailers don’t create granular e-mail marketing messages,” Cell says. “Instead, they create mass marketing messages such as a sale in a product category or free shipping on purchases over X amount. The aim is to target the message to a specific product or tendency in the shopper’s behavior.”
When mass e-mails don’t work
A shopper who has looked at one or two digital cameras over several weeks could be waiting for those products to go on sale. What the shopper doesn’t want is an e-mail announcing a camera sale that excludes the desired products because they are, say, high margin, best sellers that rarely go on sale.
“Personalized e-mail marketing is knowing the specific products, brands and categories that interest shoppers and what will trigger their purchasing decision,” Cell says. “Too many retailers look to appeal first to the masses and worry about personalization later. It ought to be the other way around.”
Regardless of how effectively retailers create a personalized shopping experience, the one inescapable truth about e-retailing is that if site performance does not meet shoppers’ expectations a return visit by the shopper is unlikely, even if they did make a purchase.
A recent Aberdeen study showed that even a one-second delay in response time can reduce site conversions by 7% and page views by 11%. However, the opposite is also true: an increase in performance can improve web site conversions. One Gomez customer, eBags, has seen a 10% increase in conversions since working with Gomez.
“A lot of retailers are under the impression that they have no control over the application delivery chain beyond their own firewall because load testing used to be performed only within their firewall, but that is not true,” says Gomez’s Schurr. “Retailers need to understand the problems first if they are going to fix them and the only way to do that is to adopt an outside-in customer point of view for web performance management and load testing.”
That’s an important advancement because many retailers incorporate third-party content and service into their web sites, such as shopping carts, e-mail and text messaging, video, and social networking. Hence, many web sites are composites assembled in the web browser that communicate with multiple servers. Most web sites today have an average of six applications provided by third parties.
The outside-in approach
“Performance testing has to be done on the applications flowing into the web browser,” says Imad Mouline, chief technology officer at Gomez. “With today’s site architecture, retailers must take an outside-in approach to performance testing.”
Opening these external applications can make up 50% or more of the time the shopper spends waiting for page downloads through a retailer’s site. Regardless of whether performance issues are the fault of the outsourcing partner, shoppers will hold the retailer responsible. The recent problem with Google Analytics that impacted millions of people is a telling example of how third-party services can impact retailers’ web site performance.
Gomez provides services that test web sites and measure their performance across the entire web application delivery chain all the way to the end user 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.
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.
“As retailers add more rich content to their sites, such as video, it enhances the shopping experience, but also degrades performance,” Santos says. “Consumers compare the performance of a retailer’s site to that of the last site they were on. So even if the less than four second threshold for page downloads is the industry standard, if the consumer was on a site that loaded a page in two seconds, that becomes the shopper’s expectation.”
Still, the acid test for meeting a shopper’s expectations for performance is whether the retailer can do so during peak shopping times over a large or even global geography. Akamai provides retailers with the infrastructure needed to support performance through its EdgePlatform, which is comprised of more than 48,000 servers in 70 countries within nearly 1,000 networks. Each server continually monitors site traffic, looks for trouble spots and assesses overall network conditions to ensure reliable performance for e-retailers.
Know the starting point
Putting performance metrics into perspective begins with getting a baseline measurement of competing sites. Baseline metrics include site and transaction availability, speed of page downloads, and consistency in the performance of the web site. Baselining helps 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.
“Retailers need to take an ‘outside-in’ view from their customer’s perspective when it comes to performance monitoring and measure their site across the locations, browsers and devices that matter to fully understand how their site performs,” says Schurr. “A lot of retailers are stunned to find out that there are problems at any one of these levels that impact customer behavior.”