Revenue increased 11.9% in Q1 of 2015, to $17.26 billion compared with $15.42 billion in the year-ago period.
A smart redesign strategy focuses on short-term goals that provide quick revenue boosts.
Phase one of an e-commerce site redesign project should target a key goal that can generate revenue that can fund future site enhancements—but a retailer should also know where it’s going, so that the building blocks put in place in phase one can be the foundation of phases two, three and beyond.
That was the core message from the opening session today of the Internet Retailer Web Design & Usability Conference in Orlando delivered by Timothy Peterson, vice president of marketing for nutritional supplement retailer NutraOrigin, and Betsy Emery, CEO of Tellus, the design and consulting firm that helped NutraOrigin redesign its site last year. They opened the full-day, pre-conference workshop entitled “Mastering the Details of Great Design”; the two-day design conference formally opens tomorrow.
Peterson described what he found when he joined NutraOrigin in late 2009: a site that attracted fewer than 100 visitors a day and converted at only 0.25%, well below the e-commerce norm of around 3%.
“NutraOrigin decided it was time to start over,” Peterson said. “We needed a complete overhaul, but we had limited funds.”
Recognizing the financial constraints, the retailer, which sells primarily via the web, worked with Tellus to develop a phased approach.
The first phase focused on making the web shopping experience better so that new customers would become what NutraOrigin calls “continuity” buyers—those who subscribe to receive regular supplies of vitamins and supplements. Because of the importance of those continuity customers, Peterson said it was crucial that the site gave consumers confidence to become regular customers. “We needed to make sure people understood what they were getting into,” he said.
At the same time, Peterson said, the retailer and Tellus mapped out goals for later phases, such as making sure the site design was flexible enough that NutraOrigin could add more brands later on, and sell wholesale via the web.
In terms of budget, NutraOrigin decided it would spend up to 10% of projected first-year revenue for the new site. That set the redesign budget at $150,000. While 10% of revenue may seem high, Peterson said, “We were reinventing the business.” Spending just a few thousand dollars would have accomplished nothing, he believed.
A redesigned site went live in 60 days, and a year later conversion rate averages around 2.4%, nearly 10 times what it was before, and traffic is also more than 10 times greater at more than 1,000 visitors a day, Peterson reported.
Average order value is down from $60 to $30, but Peterson says that means NutraOrigin is attracting more first-time visitors who could become long-term clients. “The first order that comes through on the web site is often less than subsequent orders,” he said. “People are taking a chance.”
Emery of Tellus emphasized the importance of setting a goal of improving one key metric—and only one—in the first phase of a redesign. A typical goal might be to boost conversion, traffic or average order value.
Focusing on just one helps keep projections conservative, and makes attaining first-phase goals more realistic, Emery said. Projecting increases in several key metrics leads to setting unrealistic goals and disappointment, she said. She advised retailers to set month-by-month goals, and also to map out plans for at least the second and third years of a redesign, if not for five years out.
She also advised attendees to build in ongoing annual maintenance costs for a new site of 25-50% of the original site design cost. She said online retailers also should budget a similar amount for promoting a site. Underfunding promotion, Emery said, means failing to take advantage of the new functionality a retailer has built into its redesigned site.