content jam 2014 - lauren freedman - does conversion matter?

DOES CONVERSION MATTER?-OR-

SO WHY IS CONVERSION NOT AS HIGH AS MY BOSS THINKS IT SHOULD BE?

Presented by Lauren Freedman

THE E-TAILING GROUP

the e-tailing group - PAGE 2 -

20 years e-commerce consulting Author, It’s Just Shopping 50+ years traditional retail and catalog

experience Fortune 500 client projects ranging from

strategic planning, merchandising, marketing, to technology development and messaging

Projects spanning retail landscape with global coverage

Proprietary research studies on mystery shopping, merchandising, mobile and consumer behavior

The Voice of Cross-Channel MerchandisingStraight talk from “in-the-trenches” online merchandising experts

- PAGE 3 -the e-tailing group

The Merchants: the e-tailing group 100 4Q13

1-800-Flowers Crutchfield J.Crew Orvis Sunglass HutAbt Dean & Deluca JCPenney Overstock.com TargetAmazon Dell Jos. A. Bank Party City The Body ShopAmerican Eagle Outfitters DICK’S Sporting Goods King Arthur Flour Patagonia The Children’s PlaceAnn Taylor Discovery Channel Store L.L.Bean Petco The Home DepotApple DSW Lands’ End PetSmart Things RememberedAveda eBags Lane Bryant Pottery Barn Tiffany & Co.B&H Foot Locker Lego Puma Title NineBallard Designs Frontgate Lenovo QVC Toys ’R UsBare Escentuals GameStop Lowe’s Ralph Lauren Tumi

Barnes & Noble Gap Macy’s REI ULTA BeautyBelk Garnet Hill Men’s Wearhouse Room & Board Under ArmourBest Buy Giggle Michael Kors Ross-Simons Urban OutfittersBloomingdale’s GNC Moosejaw Saks Fifth Avenue Victoria’s SecretBlue Nile Godiva Neiman Marcus Sears VolcomChico’s Golfsmith Newegg Sephora WalgreensClinique Gucci Nike Shop PBS WalmartCoach Harry & David Nordstrom Staples Williams-SonomaCooking.com Hayneedle Northern Tool + Equipment Steve Madden Wine.comCrate&Barrel HSN Office Depot Sundance Zappos


CONVERSION IN AN OMNI-CHANNEL WORLD


Revenue

Traffic to Site

Conversion

Average Order Size

Units per Order

76%

68%

64%

49%

44%

87%

80%

70%

61%

44%

Over the course of the past year (2013), how have the following key site metrics been trending?

Top-2/Significantly/Somewhat Increased

2013 2014

Q14

Retailers challenged to maintain growth patterns against formidable competitive landscape

e-tailing group 2014 Merchant Survey


Q15

0-under 1%

1.0 - 1.9%

2.0 - 2.9%

3.0 - 3.9%

4.0 - 4.9%

5.0 - 5.9%

6.0 - 6.9%

7.0 - 7.9%

8.0 - 9.9%

10.0 - 20.0%

Don’t know

9%

20%

27%

12%

9%

4%

4%

4%

5%

4%

2%

6%

24%

22%

14%

9%

7%

1%

5%

1%

5%

5%

What kinds of conversion rates are you seeing on your site?

2013

2014

Conversion rates still fall in the 2-3% range with mobile likely impacting any upward trends



Consistency across channels consumer preference

Product pricing

Free shipping

Promotions offered

Product assortment

Branding including overall look and feel

Shopping features (top sellers, new arrivals, daily deals, etc.)

Wishlists/carts

94%

92%

85%

79%

78%

69%

60%

Retailers can make choices about delivering similar or dif-ferent experiences across any or all channels. Please note

what you believe should be consistent and where being different is not an issue.

Consistency Ideal

e-tailing group/MarketLive 2014 Holiday Survey


Familiarity breeds conversion


The omni-channel shopper dynamics are in play but not necessarily converting online

• The website is a research tool and of course a buying channel

• Price is the ultimate disrupter causing consumers to change channels and select devices

• Many shoppers are using multiple devices to get informed

– 38% of smartphone owners and 31% of tablet owners will purchase on those devices in 2014 with growth for 2018 at 55% and 61% respectively 1

– 56% of U.S. Internet users use both desktops and mobile devices to access digital content online, including e-retail sites and apps. 2

• A significant number of shoppers will pickup product at retail stores where more sophisticated inventory transparency fuels those desires

1. comScore; 2014 2. Forrester; 2014


….and store conversion is an acceptable reality for retailers

Inventory noted by store

Reserve in store with 20-30 minute updates


The mobile shopping experience must be enhanced given existing barriers

UPS Pulse of the Online Shopper; 2014


Channel-centric merchandising must still be achieved

website mcommerce


IMAGE & INFORMATION

Having the right photography with complete information and tools is paramount to conversion


Product imagery is crucial to confidence building


Retailers ratchet up search results with visual dynamics to build customer confidence

Product colors Product details

Kate Spade


Video can propel purchasing

Video: 89% EG100


Online Only: 25% Badging: 45%

Top Rated: 33%

Badged product gives product priority

e-tailing group 4Q13 Mystery Shopping


MERCHANDISING EXPERIENCES

Retailers must make tactical choices in product, price and promotion and content


ESSENTIALS 2014 2013 KEY PLAYERS 2014 2013 MERCHANT’S CHOICE 2014 2013

Sales/Specials/Outlet 96% 86% What's new 79% 90% In-store pick up and/or Returns 59% 59%Email as a merchandising vehicle 94% 93% Top sellers 78% 85% Pinterest 57% 59%Seasonal promotions 93% 90% Top rated 78% 84% Wish lists 53% 50%

Keyword search 92% 94% Type ahead/Visual search 78% N/A Blogs 53% 48%

Cross-sells 90% 85% Faceted navigation 77% 82% "Like" on Facebook 52% 55%

Free shipping - conditional 89% 92% Category content 77% 81%Proactive chat (merchant-initiated) 51% 48%

Product ratings/Reviews 89% 92% Ask & Answer/Q&A 74% 61% Lookbooks 48% N/A

Alternate views 88% 86% Recently viewed 72% 67% Social log-in 45% 50%Exclusives 87% 84% Limited hour promotions (4-hour sales, etc.) 72% 65% Mobile applications 43% 56%Search landing pages that are merchandised 87% 82% eGift certificates 72% N/A fCommerce 25% 25%Alternative or deferred payment methods (PayPal, BillMeLater, etc.) 85% 74% Video 71% 77% Coupons/Rebates N/A 83%

Zoom 84% 85% On model photography 70% N/A Sharing via social networking N/A 64%

Advanced search 84% 83%Interactive tools (virtual models, design tools, configurators) 70% 66% Product comparisons N/A 62%

Mobile commerce 83% 84% Frequent buyer programs 70% 62% As advertised/As seen in N/A 49%Free shipping - unconditional 82% 80% Live chat 69% 67% Twitter marketing N/A 33%Incentives to buy (gift with purchase, buy one/get one, etc.) 82% 64% Gift center/Gift suggestions 69% 58%

Up-sells 81% 84% QuickView 67% 66%

Color change 81% 75%Shop by outfit/Shop by solution/View in a room 63% 57%

Facebook page 63% 56% Gift certificates/Cards 60% 65% In-store product locator/look-up 60% 58%

Q5-11

50 Features Ranked from an ROI perspective: Top-2/5: Very/Somewhat Important


Understanding ROI is paramount


Speed is everything for connected shopper (It counts more in mobile)

Visual Search: 29% EG100 One-Click Checkout: 43% EG100

From search to checkout, fast matters


Must-have product is in the eye of the beholder


Inspiring merchandising counts

Top Rated: 37% EG100


There are many ways to show must-have products

Lookbooks: 22% EG100


Replenishable goods reap high conversion rates


93% of consumers take action to qualify for free shipping

UPS Pulse of the Online Shopper; 2014


Risk free and stress free shopping drives conversion

20% EG100 offer free shipping on all products

Online return processing : 27% EG100


Sharp prices will be the greatest deterrent to shopping at Amazon as all other reasons pale in comparison

Sharper prices

Elevated customer service

Streamlined user experiences

More personalized shopping

More consistent shopping across channels

More curated assortments

More engaging experiences

Innovative use of social media

Evolved mobile site

74%

26%

22%

20%

17%

17%

17%

11%

10%

What have retailers/brands done over the course of the past year that would cause you to shift your business to them and away from Amazon? Check

all that apply.

Q19



The right prices

Free shipping

Valuable promotions

Retailer reputation

Product selection including exclusive items

Quality of the website experience

Loyalty/rewards program

Detailed product information and photography

Lenient return policy

Cross-channel conveniences such as buy online, pickup in store, in-store returns

Personalization of the shopping experience

Quality of the mobile experience

Peer reviews/word-of-mouth experiences shared by friends/family

Ability to send to multiple recipients in a single order

Gift wrapping/packaging options

Stored address book

80%

68%

54%

47%

44%

46%

31%

49%

33%

29%

19%

22%

25%

18%

12%

10%

80%

71%

57%

55%

48%

47%

46%

45%

38%

31%

25%

25%

24%

19%

14%

13%

Now thinking about what ultimately makes you BUY/LOYAL to a given retailer, how often do the previous factors con-

tribute to brand loyalty?Always

Loyalty

Buy

Buying and loyalty factors synonymous except retailer reputation, rewards programs and personalization have greater sway in regards to loyalty

Q14-15



Dedicate real estate to promotions

Savings center with multiple promotions

Preferred store highlighted


Remove any checkout inhibitors


Flexibility in policy performs

Satisfaction Guarantee: 66% EG100 PayPal: 62% EG100


One-click checkout ideal particularly in a mobile world

Collapsible Carts: 20% EG100


Embrace newer service and selling scenarios

Live Chat: 59% EG100


Price-related circumstances represent4-out-of-5 top reasons shoppers abandon carts

Shipping costs were too high

Found a cheaper price elsewhere

Shipping costs were hidden until too late in checkout

Found a better product elsewhere

Promotion codes or offers aren’t working

The checkout process was confusing or lengthy

Delivery dates did not meet my needsCustomer service details such as return policy were not forthcoming or

clearTrouble with username or password

Preferred payment option was not available (i.e. PayPal)

I often just use my cart to hold product temporarily or to check prices

I often just use the Save Cart feature for convenience

Forgot about the cart or got distracted

Inability to send gifts to multiple recipients in a single order

Gift wrapping/packaging not available or too expensive

64%

56%

52%

45%

44%

35%

28%

24%

24%

23%

19%

16%

11%

8%

8%

After putting an item in your shopping cart, how often are you likely to abandon that shopping experience?

Always

Q16



Put shopping cart abandonment strategies in place


Are you getting it right?

• Be consistent yet aware of channel concerns• Ensure your product photography and copy provides

every possible detail in an organized fashion• Inspire shoppers with exciting product, features and

functionality• Make it effortless to pay• Take care of the customer and your reputation


THE E-TAILING [email protected]

content jam 2014 - lauren freedman - does conversion matter?

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