Mobile accounted for 25% of Ulta's e-commerce revenue during Q2.
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Retailers wondering where to start should consider organic search, because it can deliver a quick ROI without eating up a large portion of the technology budget. Further, organic search is a more cost-effective way to acquire larger volumes of new customers than paid search and display ads, especially when retailers take advantage of technologies geared to the way online shoppers search today.
“Consumer search patterns are constantly changing, and uncovering new search phrases and digging deeper to uncover multiple long-tail search strings for specific products and optimizing landing pages for hundreds of thousands of long tail strings can collectively generate a lot of revenue that retailers are missing,” says Gary Smith, vice president, worldwide sales, for organic search services company YourAmigo. “The upside for retailers is the growth in overall sales volume and the fact they don’t have to make changes to their infrastructure for YourAmigo to mine long tail search strings on a deeper level.”
Nor do retailers need to make large infrastructure changes to add more muscle to their site search results. Including more information in site search results, such as customer reviews and ratings, links to product video and showing prices when applicable, can provide the depth of information consumers need to make purchasing decisions. That can lead to a shopper making a purchase without having to drill deeper into the site after an initial search.
Other refinements, such as including an “Add to Cart” or “Buy Now” button next to each product listed in the search results, highlighting items on sale and showing consumers the savings they will be earning by taking advantage of the sale price, can significantly boost conversions.
“Site search is not just about getting relevant products in front of consumers, it is becoming more about providing relevant information consumers need to make a purchase decision in as few clicks as possible,” says Geoff Brash, vice president of marketing for site search provider SLI Systems.
While SEO and site search may be integral parts of the online shopping experience, two of the fastest-growing areas of e-commerce are social marketing and mobile commerce. Social marketing affords retailers a way to quickly create viral marketing campaigns that can spread like wildfire through Facebook fan pages and Twitter tweets, driving a new base of loyal customers to a retailer’s site.
Mobile commerce is a burgeoning sales channel being driven by the increasing popularity of highly sophisticated smartphones that connect consumers to the web and allow them to download advanced applications that provide unique, one-click capabilities, such as making restaurant reservations or buying movie tickets. Many retailers are in a sandbox mode right now trying to understand how to leverage the marketing opportunities that the mobile phone has created.
“Retailers are scrambling to get their arms around social marketing and m-commerce, and some are taking action before they get their marketing and merchandising strategies fully in place just to get their feet wet,” says Suzy Sandberg, president of Internet marketing firm PM Digital. “There are a lot of opportunities in these channels and retailers need to be thinking more about how best to leverage them by doing lots of testing now. The idea of rapid testing is to fail quickly and gain learning on the most effective techniques and strategies so they will be in better position to have a major presence in these channels going forward. The huge growth in mobile web usage is still small-ish numbers now, but that won’t be the case in a year or two.”
As e-retail sites become more sophisticated and add more dynamic content, such as video, the one inescapable truth is that if site performance does not meet shoppers’ expectations they will take their business elsewhere.
“It’s still a given that if page downloads are slow, retailers will see consumers drop off their site and go to a competitor’s site,” says Pedro Santos, chief strategist, e-commerce, for Akamai Technologies Inc., provider of content and application delivery services. “Site performance is a differentiator that can drive incremental sales.”
Akamai provides retailers with the infrastructure needed to support performance through its EdgePlatform, which is comprised of more than 65,000 servers globally sitting over 950 networks and over 1,600 locations.
Each server continually monitors site traffic and maps the most direct route from the e-retailer’s server to the consumer’s browser. That allows Akamai to replicate and deliver a retailer’s web content and applications from servers closest to consumers, rather than from centralized servers that may be hundreds or thousands of miles away from the consumer. EdgePlatform also looks for potential trouble spots along the Internet pathway that can stall content and application delivery, and maps alternative paths around those obstacles.
Good from bad
While most new advances in e-commerce technology are designed to generate revenue by enhancing the shopping experience, retailers still need to look at technologies that can help them avoid losses from criminals perpetrating fraud.
A common mistake retailers make is to focus more on preventing suspect transactions from being processed than implementing fraud prevention models that can identify and clear good transactions quickly.
Too often, rules-based models put in place to review suspect transactions end up rejecting a good transaction because the consumer has violated a single rule. For instance, the country listed on the consumer’s billing address may differ from the country of origin for the Internet service provider that is connecting the shopper to the retailer’s site. It may be that the consumer is travelling outside the United States, which would explain the anomaly. A deeper analysis of all the data collected from the purchase, as well as historical information about a consumer’s buying habits, would enable a merchant to accept more orders and increase revenues.
Strict rules that automatically reject suspect transactions may keep a retailer’s fraud rate within the accepted industry range of 1% to 1.5% of total transaction volume. But a retailer operating that way is also likely to have a higher-than-average rejection rate, which means good transactions are being blocked along with the bad.