JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
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At the same time, name searches in the jewelry and watches category were up 18%. That shows deal-seeking consumers were searching more for the product they wanted, while those willing to spend more still searched for retailers they knew, McGovern says.
That decline in loyalty among web shoppers began before the recession, says Ken Burke, chairman of e-commerce technology provider MarketLive Inc. And the downturn did nothing to reverse it. First-time shoppers represented 83.7% of revenue for MarketLive e-retailer clients last year versus 81.4% the year before, while customers who had made three or more purchases accounted for only 6.9% of revenue compared with 8.8% in 2008.
Another sign of declining loyalty: traffic to retail sites from consumers who typed in a retailer’s URL declined to 43% in January 2010 from 46% a year earlier, Coremetrics says.
Online retailers can retain more customers by packing their sites with content from other relevant online sources, Burke says. He points to Walmart.com, which last October began integrating onto pages selling health products feeds from informational health site WebMD.com, such as guides to fighting the flu and improving diet. Walmart.com said it was pleased with initial results, but declined to elaborate.
Macy’s made its site more appealing by adding guides for finding the right boots, shoes or cookware, and consumers who used those finders were two to three times more likely to purchase than other site visitors, Anderson says. Overall, Macys.com increased its sales 30% in December and 10% for 2009 as a whole.
Where they compare
While consumers hopscotched among e-commerce sites, a sure sign they were comparing prices, that did not translate into a bigger role for online comparison shopping sites. Traffic to those sites declined 18% in the fourth quarter of 2009 compared with a year earlier, according to Compete. In part that can be explained by Google beefing up its own shopping site, Google Product Search, which attracted nearly 147 million unique visitors in December 2009, up 44% from a year earlier, Compete says.
But the shift may also stem from some retailers marketing less through comparison shopping sites during the recession. Google Product Search charges no fee when a consumer clicks on a retailer’s link, but comparison shopping engines make their money from those clicks, and they typically raise pay-per-click rates during the fourth quarter, when consumers are more likely to convert.
E-retailer DealYard.com, for instance, turned off its feeds to some comparison sites last fall and cut back on the products it fed other sites, says CEO Rob Heller. Heller says the profit margin on lower-priced products was not high enough to justify the comparison sites’ fees, especially when those fees went up during the holiday season.
Overall, Hitwise says referrals to retailer sites from a category it calls Rewards and Directories-which includes comparison shopping engines but not Google Product Search-declined 5% in December 2009 from the prior year.
The other marketing channel that took a hit was e-mail, whose share of traffic to retailer sites declined 14%, Hitwise says. That makes sense because marketing e-mail aims to entice consumers to buy items they may not have been thinking of buying, says Andy Lloyd, CEO of e-commerce technology provider Fluid Inc. When consumers search, they are looking for an item, and thus search figures to perform better in a recession, he says.
E-mail is a cost-effective marketing tool, and the top 100 e-retailers sent out 12% more e-mail in 2009, according to the Smith-Harmon unit of e-mail service provider Responsys Inc. But consumers often ignored the messages. Open rates during the 2009 holiday season declined to 10.3% from 11.7% a year earlier, and click-through rates dropped from 2.4% to 1.9% for clients of e-Dialog, an e-mail marketing firm that is part of GSI Commerce Inc.
But those trends were not uniform through the holiday season, says Laura Saati, group director for the retail practice at e-Dialog. Consumer response to e-mail was especially low before Thanksgiving when the open rate dropped 17% from a year earlier, and Christmas week, when click-throughs declined 33%.
Saati says those declines reflect the extreme discounts retailers offered at the beginning and end of the 2008 holiday season when the economy seemed to be in free fall. “If you want to buy your business you can go out with extremely aggressive offers and folks will open those e-mail messages,” Saati says.
Some retailers found other ways to maintain e-mail performance. For instance, Organize.com, which sells storage and household items, featured new products and “deals of the day” in its e-mails, and lowered to $39 the free shipping threshold for the Monday after Thanksgiving, says Deborah Shearer, vice president of marketing and merchandising.
Really great deals, a result of wineries offering deep discounts on their products, produced consistently good e-mail returns in 2009, says Brian Zucker, co-owner of K&L; Wine Merchants. “The quality of the deal was the overriding factor in click-through and conversion,” says Zucker, who says segmenting his e-mail list using technology from StrongMail also boosted results.
Other e-mail marketers experimented with new ways to lure shoppers focused on price. For instance, a few tried putting discount codes in the pre-headers of e-mail, the small text that often encourages recipients to add a retailer to their address book, or in the message’s subject line, says Chad White, research director at Responsys.
When they bought
The deep discounting of late 2008 appeared to impact the behavior of online consumers throughout 2009. There were unusually sharp online sales peaks around holidays, such as Valentine’s Day and Mother’s Day, when online retailers offered promotions, then declines until the next holiday, says Squire of Coremetrics.
As the Christmas season approached, volatility increased, as consumers more often added items to carts to see total prices, without purchasing. That showed up in shopping cart abandonment data compiled by SeeWhy, whose technology helps online retailers retarget consumers who abandon online purchases: after remaining in a narrow band of 65-68% for most of the year those rates began fluctuating widely in September.
“Beginning in September, people basically stopped buying in anticipation of the deals coming along,” says Charles Nicholls, founder and chief strategy officer of SeeWhy.