As customer expectations rise, the number of platforms and devices explodes. And as senior management looks for ways to achieve higher and more efficient performance, the online merchandiser’s job grows increasingly complex. While we’ll be spending time on many of these areas at the upcoming Shop.org Merchandising Workshop in San Diego in mid-July, last week’s Shop.org webinar “Rewind, Reset, Retool: Monitoring Trends and Prioritizing Merchandising When Customers are in Control” teed up many of those topics. Sponsored by BloomReach, this expert merchandising panel – including Lauren Freedman of the e-tailing group, John Lazarchic of PETCO, and Elizabeth Ragone of HSNi –honed in on 7 key areas for merchandisers to focus on this year.
1. Efficiency Rules: As Freedman noted about today’s consumers, “They’re in a hurry, convenience always comes up over price – and we know how important price is!” Freedman lauded PETCO’s decision to place “quick reorder” at the top of the home page to make things super efficient for the customer. Similarly, when searching for a “red camera” on HSN, Freedman pointed out that the site showcases a selection of options, with the ability to easily refine the search in the left hand navigation, along with a helpful selection of best-sellers laid out as well. In a similar vein, Lazarchic highlighted PETCO’s addition of the pop-up ”toaster” – a promotional banner that pops up from the bottom of the page showcasing a special or a promotion – that appears when the customer lands on select category pages. Since a lot of PETCO’s traffic comes from paid and natural search, they realized that many customers won’t see promotions highlighted on the page. Enter the toaster, which conveys those messages without pushing down content like a traditional display ad at the top of the page. PETCO has seen “a nice uptick in conversion” and, via A/B testing, has found that it to be particularly effective for higher ticket items.
2. Rich Information: Freedman noted that rich information is key to giving the consumer confidence to ultimately “pull the trigger” and complete the sale. Retailers have taken a variety of approaches to rich information: For example, Room & Board offers consumers a buying guide for a high consideration product that is truly “an investment for many people.” These buying guides also support in-store purchasing. By contrast, The Finish Line gives more of a product detail page focus with multiple detailed alternative views, plus color, size and detailed customer ratings information. When HSN Digital launched its dress shop, it also developed a short “quiz” to help customers find out what kind of a dress shopper the customer is. Ragone explained that this quiz surpassed all expectations, becoming a very popular feature with customers, who are also able to share their dress shopper type with friends and family – a nice customer engagement feature. PETCO has implemented business rules to trigger proactive chat to help customers particularly with either high consideration items (such as a wireless fence), a high value shopping cart, or who have simply paused for an extended period – and have seen increases in both conversion and average order value as a result.
3. Videos Bolster Merchandising: Freedman noted that 36% of consumers surveyed as part of the e-Tailing Group Video Behavior Survey said they had watched 5 or more product videos on websites in the past 3 months. Videos are popular across a broad swath of categories from Clinique’s “Beauty Made Easy” videos to loads of how to videos on The Home Depot’s site. HSN’s TV-based retailing origins made the case years ago that video is key – not only to convey immediacy, but also to show things like the drape of a dress. “Wow content creates authority,” Ragone underscored. PETCO’s Lazarchic added that product videos can improve SEO rankings. For the customer, being able to click from the video to a purchase page is powerful.
4. Visualization Tools: As tablets become more ubiquitous in consumer hands, Freedman emphasized that “the role of look books is very, very important, and we’re going to see more and more of these types of tools.” She specifically mentioned how J.Crew uses visuals to showcase its products and collections. Taking a somewhat different tack, HSN Digital has entered into a strategic partnership with House Beautiful magazine to boost its authority and credibility in the home space. For example, HSN Digital showcases its products in an “echo” of a House Beautiful feature to help customers get that “look”.
5. Social Integration: “While we may not be seeing the revenue that some of us had hoped for initially, certainly the [customer] engagement is in play,” Freedman noted. Freedman cited examples such as Sephora’s BeautyTalk, which covers the latest buzz around all things beauty, as well as King Arthur Flour, whose passionate customers form a very active community. The realms of social personalization and integration will likely go hand-in-hand for many years to come in the online retailing world.
6. Cross Channel Consistency: Pottery Barn has done a nice job of keeping the experience consistent, Freedman illustrated, “not only from a visual branding perspective, but also a merchandising perspective as well.” As she further pointed out, however, The e-Tailing Group research shows that just 15% of retailers surveyed feel they “already have a seamless shopping experience in place”, another 22% expect to have that in place by the end of this year. But the rest are looking at 2013 or simply don’t know when – or if – this will be a reality for them. This begs the question: What tactical measures are there to get closer to cross-channel consistency? At PETCO, the online merchants meet weekly with store merchants to coordinate. Both merchant groups meet directly with vendors and attend many of the same meetings to stay in the loop and execute in-sync. Ragone noted that this is very similar to what happens at HSN Digital, but also emphasized that it shouldn’t be about “consistency for consistency’s sake”, instead retailers have to figure out what each channel does best and capitalize on those differences.
7. Know Your Customer: Freedman concluded that the bottom line is that retailers have to know their customers – and loyalty programs, such as Nordstrom’s “Fashion Rewards” and REI’s Co-Op programs, are one way to glean that insight. To this end, PETCO recently moved its PALS Rewards loyalty program online, and has found that the program is introducing many store customers to the website and prompting those customers to start shopping online. Ragone’s advice to retailers: “Go through your data [and] listen to your customers!” In our busy, omnichannel world, this adage is more imperative than ever.