Editors note: In his first article for Think Vitamin Rob Smith looks at his top five themes for e-commerce for 2010. Whether you are considering starting an online shop or have one that isn’t performing as well as you would like these valuable tips will help you on your way.
Purchasing online and e-commerce has been growing at a rapid rate for many years and during that time things have changed massively. From online merchandising to order management to delivery, things are constantly evolving.
This article is aimed at giving what I believe are 5 important themes in this area over the next year, and what you can do to help yourself or your clients prosper.
1: Focus on Growth and Existing Customers, Not New Ones
The number of online customers has been growing at a fantastic rate over the past decade fueled by the widespread adoption of broadband. This has resulted in an ever growing number of new potential online customers.
Due in part to the recession, and in part due to the slow down of broadband adoption as it reaches near ubiquity, the growth of potential customers is predicted to slowdown in 2010. This has the net effect of new customers being harder to acquire due to reduced amount of overall growth, and more people targeting these new customers as online retailers keep appearing every day.
This leads to the need to focus more on how well we do with our current customers. Examine your customer contact strategy and ask these questions:
- Do you regularly communicate with your customers?
- Have you segmented your database into groups of like minded people?
- Do you then send targeted messages to those segments?
- Have you increased your average reorder rate in the past year?
These questions will give you a good insight into how well you’re doing with your current customers. The time has come to step up your activity to try and retain and grow your current customers.
All the time other online retailers are targeting your customers to try and win their business. You need to work hard to keep building relationships with your customers so they don’t even think about looking elsewhere.
Bodon (a UK online and catalogue company) do a good job of email marketing and customer care, including emails like ‘You haven’t shopped with us for a while and we miss you’. These do a really good job of reconnecting with the user.
2: Tie your Channels Together
Customers will no longer accept (without damage to your brand) discrepancies across your channels. If you’re a bricks and mortar retailer then you need to be able to tie your online offering to your offline offering to ensure customers are not disappointed.
They should be able to order online and pick up in store an vice versa. If you have a telephone mail order element to your business that should tie in with your online business to allow order tracking. There are many more examples, but the bottom line is this:
Customers are becoming channel blind. They see all your ‘ways to order’ as being interlinked and interchangeable.
Here in the UK, Marks and Spencer (a “national treasure” of a retail company who have both bricks and mortar shops and online ordering) have done a good job of tying their channels together. You can order online and get it delivered to home, work, or to a store.
You can return items to a store or by freepost direct. It all makes the experience more congruent and feels like you’re dealing with one helpful company. Argos (one of the biggest UK retail companies) also do an excellent job with the ability to reserve items online for store pickup.
Gap, on the other hand, do a poor job. There’s been little investment in the online channel for the UK and Europe, you can’t even purchase online at point of writing, let alone reserve or see what stock is available.
3: Mobile is Coming
I know, it’s been coming for years. However it’s widely believed that smart-phone adoption will reach a critical mass in the next 12-18 months. What does that mean for us? Customers will have access to the internet or at least a much richer media experience via their phones. People generally always have their phones with them. On the train in the car, the office, at home on the sofa. Many more people have phones than laptops.
What does this mean for e-commerce? Will people really shop and look through entire catalogues to order? Maybe not. Will they bob on their phone to track their order? Maybe. It’s all about context and how they are using their phone to communicate with you and your service.
Some companies are already striving ahead. Pizza delivery companies like Dominoes and Pizza Hut are doing well in the space creating applications and mobile focused websites to help with ordering. It’s important to note that we don’t mean iPhone applications here. It’s a combination of applications and mobile focused websites that are the key. The iPhone is still not a massive % of the mobile space.
Other notable successes in this area are Amazon and Interflora. Some notable failures are Tesco (UK supermarket chain), Sainsburys (UK supermarket chain) and play.com (online entertainment retailer) – all without a whiff of a mobile site on my iPhone.
4: Focus on Form as Well as Function
A lot of e-commerce sites have become very good at getting the basics correct. Good, clear statements about delivery, stock availability and product information are becoming much more commonplace. Checkouts are getting easier to use and less cumbersome.
There’s been a positive focus by most major retailers over the past year to really improve the customer experience in this very functional way. If you or your clients have not got a lot of e-commerce best practice in place then you need to do so before you rapidly fall behind.
Now has come the time for these retailers, as well as smaller retailers, to invest more time in the form side of their sites. By this, I mean the visual merchandising and guided purchases. There’s a lot more that can be done by bundling “like” products together, allowing people to purchase packages of products as opposed to just one.
A good example of this would be a retailer who delivers products for the home. More needs to be invested in tieing products together via well photographed roomsets where people can then quickly and easily purchase items they like from that room. Especially if the brand is stylish or well regarded this approach can work very well as people very often like to reflect the image that a particular brand projects.
This can of course be done by smaller retailers as well. Electronics sites could easily bundle TV starter sets together or the ultimate HD kit . Not enough is being done to intelligently link single products together to form a more cohesive whole, and a better buying proposition.
Good examples of this are starting to crop up in many places but there’s still a lot to be done. Glasses Direct (online glasses retailer) do an interesting virtual mirror (even if it is only for Windows), Next (large UK retail brand for clothes and home) have a lot of videos showing models on the catwalk, and tobi.com even has an augmented reality dressing room focusing on the product and it’s form and connection with user, rather than the function of selecting and checking out.
Watch this YouTube video to learn more
5: Tweaks, not Wide Spread Overhauls
This is a theme for many normal websites, not just e-commerce sites, and revolves around tweaking and gradually evolving, instead of scraping and starting again. It’s a habit of the web industry, especially if you start working with a different agency or developer, to be tempted to throw out your current site and start again, and do that every two-three years.
This is incredibly expensive in comparison. The return on investment of an entirely new site without changing any other aspect is normally quite low, especially in the short term. It is wise to heavily evaluate what you will get from a new site. Why can’t you just refresh your current one, or just tweak some of the functionality and processes to make it more up to date for your customers’ needs?
Very often, a concentrated and considered approach to optimising your conversion rate can help your sites profits much more than a complete site overhaul. It’s not as sexy, and it’s not as exciting for either side, but it’s Return on Investment is normally far in advance.
Good ways to look at how to measure conversion rates can be heatmaps, user testing (either face to face or remote), and looking deeply into your analytics.
Amazon are the king of small changes done overtime making big overall differences. They continually evolve what they do but at a slow pace. The thing is, they do not want anyone to notice anything is changing – big overhauls will cost Amazon millions of abandoned carts due to everything now being different. To learn more about this read “Hidden Secrets of the Amazon Shopping Cart”.
Conclusion
A lot, as ever, is changing in e-commerce as it does every year. Customers are becoming more sophisticated in the way they use technology and the way that they shop. The better the experience they get from your site the better you will be at cutting through the noise of countless other retailers.
It’s really easy to start an online shop, it’s pretty tough to start a really good one. Make sure you have the basics sorted out first before looking towards future themes and cool technology. If it’s hard to pay on your site then all of the above should not be your focus. If on the other hand you’re now looking at ways to eek that extra bit of conversion and customer delight out of your site, then these are for you.