According to a recent Bloomberg article, GameStop, Gap Inc., J.C. Penney and Nordstrom have all closed their Facebook storefronts over the past year. This shouldn’t be a surprise. While Facebook may be the most visited website, with 845 million members, consumers go there to hang out, not shop. Sucharita Mulpuru, an analyst at Forrester Research, refers to this as “like trying to sell stuff to people while they’re hanging out with their friends at the bar.”
For brand marketers, Facebook is a great place to engage directly with consumers, build relationships and drive traffic to their ecommerce sites. But Facebook as a shopping destination? With a few notable exceptions (inherently social businesses such as music, games and entertainment), it just doesn’t make sense to invest in a Facebook storefront. But using Facebook to drive traffic to your ecommerce site is a well proven and very effective method of driving high quality traffic to the site.
A year ago, we stuck our necks out and called the Facebook commerce baby “ugly.” Despite all the hype, we advised steering clear of Facebook storefronts and focusing on ecommerce social integration via plugins (Forget Selling on Facebook (for now) – Think Social Plugins). Since our original post last year, the picture has become more complex since many consumers now have a variety of devices for socializing, researching and shopping. This fascinating infographic from the Internet Advertising Bureau shows how different devices are used for different purposes during the day.
Note how desktops are considered more secure (68%) and great for storing important information (72%). By comparison, the benefits of smartphones are ‘Keeping in touch on the move’ (95%) and ‘Socializing with others’ (78%).
While consumers will undoubtedly use a variety of devices, their preferred device for shopping is a desktop/laptop and an ecommerce site. (…)
In 2011, the shopping cart abandonment rate continued its rise, reaching a new all-time high of 72% by the end of the year. In this blog, I’ll try to answer why the shopping cart abandonment rate has risen, despite a focus on conversion optimization by many ecommerce sites. I’ll also explain why I predict that the shopping cart abandonment rate will continue to rise in 2012.
Everything is more exaggerated over the holiday period: Retailers offer a dazzling array of new products, coupled with equally dazzling promotions, while trying to manage the constant problem of out-of-stocks. And customers make an abnormal number of purchases in a very short period and abandon their shopping carts in droves as they search for the best deals. (…)
The theory goes that if you make it easy for visitors to follow a simple path to conversion, you’ll generate traffic and revenue.
And yes, this is correct.
But this “single track” view of conversion is overly simplistic.
In this column, let’s explore why, and how it’s important to consider all of your available conversion paths.
Why Customers Don’t Buy
Only 3 percent of visitors buy within one session on an e-commerce site. And once they get as far as the shopping cart, 71 percent will abandon. To understand why, Forrester Research asked 3,000 people why they abandon.
Source: Forrester Research, May 2010; “Understanding Shopping Cart Abandonment” Note: Respondents were able to give multiple answers
As it has been for years, the cost of shipping is still the number one reason why people abandon their online shopping carts. What’s interesting to note is that none of the top reasons have anything to do with the actual checkout process. They’re all behavioral and related to lack of readiness or willingness to pay the final purchase price.
So, making the checkout process easier for the first-time buyer is only part of the answer when addressing cart abandonment. In fact, many have learned that once changes are made, abandonment rates are still high.
Multiple Paths to Conversion
Visitors will make multiple visits to your site before finishing a sale. And on their journey, there are many different purchase paths they may follow.
After analyzing the online buying behavior of over 600,000 consumers across numerous e-commerce sites, I learned that surprisingly 75 percent of shopping cart abandoners would actually return to the site they abandoned within a 28-day period. This defies conventional wisdom: we polled online marketers and 81 percent believed that the majority of abandoners never return.
Additionally, these returning visitors are more likely to finish their purchase, as well as make future purchases. (…)
It’s official: Free shipping is the shoppers’ top retail promotion of choice, driving the majority of customers to buy and to spend more than with any other promotion. This holiday season, customers will be even more price-sensitive, looking not only for the best prices, but free shipping and returns as well.
As we have written about before, customers have become trained to wait for holiday offers prior to making purchases. A tighter economy suggests that this holiday season should see good growth for ecommerce sites as consumers look online for the best prices. However, there is evidence that the 2012 consumer is also moving online to save money across a spectrum of goods, including luxury items. (…)
For many website visitors, the Online checkout user experience is far from intuitive. I just came across this great viral video from the Google Analytics marketing team on the online buying process. Taking the simple idea of what it would be like to have to go through an online shopping process in a physical store, there are many painful home truths exposed here in an amusing way.
The video follows a man trying to buy a loaf of bread in a British supermarket, but being forced to go through an online checkout process. What fun – it should resonate well with all ecommerce teams and user experience experts alike. It’ll also make you chuckle and cringe as well. What’s amazing is that it takes him so long before he abandons his shopping cart.
Enjoy!
To a crowd of more than 3,000 merchants, developers and entrepreneurs, eBay launched X.commerce last week in San Francisco. In this blog we’ll look specifically at what X.commerce means for ecommerce merchants.
John Donahoe, president and CEO of eBay, describes X.commerce as ‘the world’s first open commerce ecosystem. It’s a full stack of tools for developers and merchants to make the new commerce a reality.’
The new commerce that Donahoe is referring to is a world where online, mobile, local and offline are merging at blistering pace. ‘We will see more change in the next 3 years in the way consumers shop and pay than we’ve seen in the previous 15 years. Offline retail hasn’t changed that much in the last 15 years. Ecommerce has been fairly distinct from the offline experience. Smartphones are blurring the lines between offline and online faster than anyone could have imagined.’
Donahoe refers to the new world as ‘not ecommerce – just commerce’ referring to the increasing proportion of sales that are web-influenced or online – currently more than 50% of all sales.
While you may still think of eBay as an auction site, their intent to become a leader in ecommerce platforms has been clear for a while. Through a sequence of acquisitions, eBay has assembled a powerful collection of ecommerce tools. Yes, eBay is a software company now, as well as a payments company, and a marketplace. (…)
Last week at the Conversion Conference in San Francisco I had the pleasure of interviewing Tom Davenport. Tom, is a Babson College Distinguished Professor, and research/faculty leader and co-founder of International Institute for Analytics.
I blogged last week on his keynote to the conference. In the video interview below, I ask Tom specifically how we can apply his thinking to ecommerce and web analytics.
Some key takeouts from this interview:
If you’re an analyst, it may be easier to move to a different employer than struggle to make analytics relevant to your organization
Companies that compete on analytics often look to hire-in analytically oriented talent when building teams
More data in ecommerce means that there’s enormous scope to get competitive advantage from your data
Many ecommerce companies are still struggling to make web analytics actionable
The average number of web analysts per company is 0.25 full time equivalents
Do you agree with Tom? Let us know your thoughts below. Please also let me know whether video blogs of this sort are useful. Thanks in advance!
The code to embed this video on your site can be found here. Click on the ‘Share’ tab to copy the embed code, and the ‘Details’ tab to download a copy. (…)
When Tom Davenport keynoted the Conversion Conference in San Francisco this week, he set out to inspire ecommerce teams to focus on the business, not on the analytics themselves. Quoting Carl Kemp, the chief mathematician at Intel, ‘It’s not about the math… it’s about relationships with the business,’ Tom encouraged web analysts and eMarketers to embrace bigger business challenges and look beyond their current horizons. Rather than focusing on the numbers, he advocated building relationships with business management by offering solutions to business challenges.
For his groupies, Davenport has neared deity status. As President’s Chair in Information Technology and Management at Babson College, he teaches MBAs and executives about decision-making and analytics. But he’s best known for legitimizing and making analytics relevant to business with his breakthrough HBR article and subsequent book, Competing on Analytics: The New Science of Winning.
In short, he made analytics sexy to business leaders for the first time.
Davenport showed, in Competing on Analytics, how companies including Netflix, Google, Amazon, Harrah’s, and Capital One have focused their organizations on analytics as a critical competence. By making analytics an integral part of the way these companies run, they make better decisions, optimize processes and achieve strategic advantage that enabled them to become leaders in their markets. These companies test, measure and refine on a continuous basis.
But for the majority of companies, analytics are not central to the business, and Davenport found a receptive audience eager to learn new ways of engaging senior management. His recipe was simple: focus on helping the business to achieve ambitious outcomes which would not be possible without analytics.
In listening to his keynote, I was reminded of the Australian mine that told the AkzoNobel chemical company that their explosives were no longer required—the mine had found a cheaper supplier. (…)
In this video blog, SeeWhy Founder Charles Nicholls reviews the CPO Milwaukee power tools ecommerce website, from a remarketing standpoint.
There’s no substitute for testing when it comes to optimizing shopping carts. But once you’ve have tested and tuned, and your conversion rate has improved, what do you do when your shopping cart abandonment is still frustratingly high?
If this is where you’ve got to then it’s time you looked beyond the shopping cart conversion rate, and looked at remarketing. Remarketing takes those visitors that leave the site without buying, and markets to them again using either advertising, email or social media. These are your best prospects – visitors that almost purchased – so it’s no surprise that a sequence of nudges brings customers back in to buy.
The most cost effective way to recover abandoned shopping carts is by using email remarketing. The cost of recovering an abandoned shopping cart by email is 100 times less than by advertising. Of course retargeted advertising has an important role higher up the funnel, where you haven’t captured an email address, and would like to bring them back to the site.
One of the subjects that comes up early in a discussion about email remarketing is how and where to capture email addresses. So in this walkthrough, we suggest simple shopping cart design and email capture tips to maximize both onsite conversions and your recovery rates.
This walk through essentially covers three core subjects:
Conversion enhancements to the site
Email address capture; opportunities to capture more email addresses without impacting conversion rates
What type of remarketing email creative can be built for the site using this kind of information.
Hopefully you’ll find the tips and approach useful. Let me know what you think using the comments below.
Online retailers roll out holiday promotions this week to combat high shopping cart abandonment rates.
Two thirds of online retailers are rolling out holiday promotions this week or have already done so. 61% of holiday promotions this year will be focused around free shipping, and 29% on promotional discounts. Multi-buy and free product offers will account for only 10%. (…)
According to a recent Bloomberg article, GameStop, Gap Inc., J.C. Penney and Nordstrom have all closed their Facebook storefronts over the past year. This shouldn’t be a surprise. While Facebook may be the most visited website, with 845 million members, consumers go there to hang out, not shop. Sucharita Mulpuru, an analyst at Forrester Research, refers to this as “like trying to sell stuff to people while they’re hanging out with their friends at the bar.”
