Minding the Store is a classic book written by one of the all-time great merchants, Stanley Marcus of Neiman-Marcus fame. Its lessons were extensive, but taking care of the customer and delivering a well-merchandised experience were two of the essential components.
Today, it is imperative that multichannel merchants heed these lessons; both are critical to their ultimate success. Annually, the e-tailing group conducts a survey of merchants to understand trends in strategy, merchandising and marketing online. This month’s column is dedicated to the merchandising highlights from our Sixth Annual Merchant Survey in which 167 merchants shared their wisdom and insights for the sake of advancing multichannel merchandising.
Conversion rates steady
The etailing group’s Sixth Annual Merchant Survey queried the 167 sampled merchants as to their online conversion rate. For this, we defined “conversion” as the number of orders received divided by the number of unique visitors to the site.
Using this definition of conversion, the average 2007 conversion-rate range in our survey was 3.0 percent to 3.9 percent. That is, on average, between 3.0 percent to 3.9 percent of all visitors to the merchants’ sites purchased a product. This was the same conversion-rate range as occurred in the 2006 survey. It was slightly higher than the 2005 survey, where the average conversion-rate range was 2.0 percent to 2.9 percent.
Merchants are using their full merchandising arsenal — pulling out all the stops to meet customer expectations with an array of tactics, including the increased use of nearly every one of the 50 benchmarked features in the survey. Best-in-class merchants tend to push even further ahead with initiatives that enhance the customer experience from rich media to community to customization.
Stacking up the feature set
To gain an understanding of the value of specific merchandising tactics, 50 features were ranked on a five-point scale with “5” being “very valuable” and “1” indicating “not at all valuable.”
“Exclusive offers” are new to our survey and already high on the list: 78 percent of surveyed merchants ranked exclusive offers “very to somewhat” valuable. On a side note, when merchants were asked for their top three customer retention tactics, exclusive offers topped the list in many instances.
An example of this comes from Levenger, a retailer of premium reading accessories, who wisely suggests (via email notices) to its customers that its items are exclusive to Levenger. Catalogers and savvy retailers have long made extensive efforts to produce and present exclusive goods, with the resulting contributions reflected in the bottom line.
Hitting the content road
Customized content is ranked very to somewhat valuable by 66 percent of merchants with ratings at 48 percent and community components at 41 percent, both up and comers in this year’s study.
Content supports selling initiatives and, by way of example, Road Runner Sports, which sells running shoes and apparel, seizes the opportunity. The company’s new site marries best selling practices with a sense of community among running enthusiasts. Runners can access a lot of related content, such as running information, training lists and runner stories.
Product page prowess
Customers today are most often linked into the interior of a site, often bypassing the home page. With that in mind, these interior pages must be engaging. As such, many merchants now use rich media to help display and explain their products. Types of rich media we’ve seen include video, audio, alternative product views, color-change abilities and zoom and pan functions.
For example, HP’s Home & Home Office Store, which profiles HP home and office equipment, gives a digital camera a selling advantage with a clean, crisp layout that manages to incorporate all the necessary selling elements. Starting with a series of alternative views that move beyond the standard zoom, the camera’s presentation allows shoppers a tactile sense often missing online. The product overview, consumer ratings and access to recently viewed product personalize the experience. Promotions are present and well showcased in a competitively priced category that includes the ever-popular free standard shipping.
These are simply a few of the myriad of features merchants can employ to take a site to the next level.