When it comes to a retailer’s website, the tinkering never stops. Whatever the incremental improvement—move this button, return these results in this region, recommend this, not that—it’s tested, measured, refined and tested again, all in an endless pursuit to make conversion rates climb higher and higher and make the customer experience better and better.
We’ve got website design and usability on the mind leading up to this month’s Shop.org Online Merchandising Workshop, so to pick up a few trends, best practices and website optimization tips for our readers before the event, I asked Bruce Ernst, the Vice President of Product Management at Monetate, a marketing optimization technology firm that works with the likes of Urban Outfitters, Dick’s Sporting Goods and Godiva, to share some insights about what’s working for their retail clients’ websites.
What are the top trends you’ve noticed in online merchandising in the past few years?
A few big trends have been, first, a shift away from algorithmically-driven approaches to merchandising, and second, an increase in the amount of testing taking place.
First, there’s almost universal agreement that magic “black box” algorithms deliver neither the results nor the transparency that merchandisers need to justify continued investment in product recommendations and endcaps. And it makes sense why–there’s not much “wisdom” in crowd-based approaches that essentially just operate on the Law of Averages. Every customer is different, but more importantly, merchandisers know their customers better than anyone else. Where algorithms are involved, there’s a desire for transparency–and an even bigger desire for manual controls that let the merchandiser make real decisions about who sees what.
Second, merchandisers want to test because it’s really the only way to get an accurate estimate of Lift and Incremental Annual Revenue. By comparing the performance of an Experiment Group against a Control Group that doesn’t see product recommendations (or enhanced search results, or any other merchandising tactic), merchandisers get to see true ROI. And that’s a lot better than saying, “We think it’s working.”
What challenges do retailers face today when it comes to getting the right product in front of the right customer at the right time?
It goes without saying that customers can’t purchase what they can’t find, but merchandisers need to be able to address this challenge from a number of different angles. And historically, internal site search has exacerbated, rather than alleviated, these challenges.
That’s because many site search engines are simply document retrieval systems. But customers don’t buy documents–they buy products. We’re seeing a lot of interest in predictive, type-ahead visual search that puts actual SKUs in front of visitors, rather than “best match” web pages.
These search results can now be targeted as well, which helps address the problem of generic searches such as “women’s footwear.” If we know you’re in Miami vs. Minneapolis in the middle of winter, that can go a long way toward ensuring we show you the right products.
Retailers attend the Shop.org Online Merchandising Workshop to discover new merchandising technologies and to learn tactical tips to improve their website design and usability. Can you share one specific website improvement retailers can make that will yield big results?
Dynamic product badging is a highly effective tactic that most merchandisers still aren’t using. It involves dynamically rendering badges or text on top of your existing product images. The idea is to highlight important product attributes, such as whether an item is “New,” a “Top Seller,” “Staff Pick,” or “Just for You.”
And the reason it’s so successful is because it happens right where the visitor is looking–the image. That’s in contrast to product recommendations, which are sometimes ignored because they’re off to the side or down at the bottom of the page.
What metrics are most important to consider when planning tactics to increase conversion?
It’s important to start at the top of the funnel. A lot of people think that means you start with the “Add to Cart Rate,” but a lot has to happen before a product is carted.
So first is “Bounce Rate.” How many people abandon the site without ever reaching a product page? Another is “Top Exit Pages.” It’s very common for search results to rank among the top exit pages on a website–delivering bad results is like a giant billboard that says, “Abandon Site Please.”
You can’t really increase sales or maximize the conversion rate if you can’t get visitors to your products.
How can retailers incorporate product recommendations into their sites more effectively?
Product recommendations can’t be a standalone tactic. They need to be used in concert with a variety of actions that help visitors find products more easily, make a purchase decision (i.e., carting the product), and ultimately completing the checkout process.
That means that product recommendations are an essential ingredient, but they’re hardly the recipe for full success. When product recommendations are complemented by visual search, dynamic product badging, and other tactics that take place specifically within the cart, the whole merchandising process starts to come together.
Specifically regarding recommendations, though, it’s important to test effectiveness within the shopping cart because it’s very possible that in-cart recommendations disrupt the checkout process. Recommendations on the “Thank You” page can do no harm, but within the cart itself–that’s where merchandisers need to test.
According to the recent 2012 Social and Mobile Commerce Consumer Study, adoption rates for mobile devices continue to grow significantly, and smartphone owners are increasingly using mobile devices to shop. Which retailers are doing a fantastic job with optimizing their websites for the mobile shopper?
QVC does a great job with mobile and that’s because they have a true mobile website, in addition to an app.
Mobile apps can be highly effective in their own right, but it’s difficult to test and optimize them because they’re hard-coded programs. With a mobile website, it’s much easier for merchandisers to employ similar tests and tactics that are on the main website. It’s all about the economies of scale.
What new opportunities do you see for merchandisers in the coming years?
With every opportunity comes a challenge. I think the next big thing revolves around HTML5 and how that may change (or evolve) online merchandising. On the surface of it, HTML5 has the potential to help improve how merchandisers deliver the most relevant shopping experience possible. At the same time, though, it has the ability to be misused–to do things simply because they look interesting rather than because they convert.