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CDC Software eCommerce - white paper

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The good news for many online retailers is that while ecommerce generally is not …

The good news for many online retailers is that while ecommerce generally is not
immune to the downturn, it is a cost-effective, growth oriented channel—even in tough
times. Nevertheless, this year promises to be a tough one—and online sellers are
going to have to pull out all the stops to engage skittish consumers.

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  • 1. W H I T E P A P E R Ringing in the Holiday Buyers in a Challenging Economy Executive Summary Remember when the Sears Wish Book arrived in your home every year at this time—just as the weather got cooler, days shorter, and nights a bit longer? It seemed television commercials rang out Holiday tunes while they displayed the hottest new toys in town? A buzz of excitement began to stir, and the Holiday shopping season was upon us. Let’s face it, the holidays are a retailer’s dream, full of good cheer, family and friends—the perfect scenario for buying. It’s pretty safe to say, however, that this year is a little different. The current economic climate has cast a chill (literally) over consumer spending, not to mention the profit margins of many retailers around the world. The good news for many online retailers is that while ecommerce generally is not immune to the downturn, it is a cost-effective, growth oriented channel—even in tough times. Nevertheless, this year promises to be a tough one—and online sellers are going to have to pull out all the stops to engage skittish consumers.
  • 2. Ringing in the Holiday Buyers requirements for the Season adds to their interest in your online store. This is particularly helpful to the numerous in a Challenging Economy shoppers who aren't clear on what they're after. They'll want to come in and look at your ideas for inspiration. As Perhaps more than ever, now is the time for creative the retailer, you know what the best sellers are likely to be solutions to capture your share of those purchasing for the holidays, and placing them in this holiday section dollars. And to make sure your site is providing the best eases the effort for your buyers who may be running consumer experience in order to support your business around with shopping lists 'til they drop! You can also use goals. That’s why CDC eCommerce has put together our this concept to take advantage of after-Holiday buyers Etailer’s Guide to Ringing in the Holidays in a Challenging with a "Holiday Gift Clearance" section. Economy. We have divided this White Paper into two main sections. Section A: Maximizing Your Market Share discusses how to get festive; simplify the buying process, and get creative with incentives. Section B: Maximizing Your Online Potential addresses four key technology support issues: Demand Generation (which includes shopping engines; third party endorsements; long tails, and affiliates); Conversion of Browsers to Buyers (which includes comparison shopping, left navigation, customer service, trust and security, wish lists, and shopping carts); Increasing Basket Dollars, and Improving Customer Loyalty. A: Maximizing Your Market Share A similar idea is to bundle items by theme. So, for example, to help those millions of people buying for Get Festive teenagers create a tab that directs them on the path to the top twenty, thirty, or more items teenagers are The first reminder to a shopper that it's time to think interested in. This will boost their buying confidence that of holiday buying is festive decorations. As soon as they're getting the right Halloween has passed, the festive lights and sounds of present for the teens on the holidays pop up in store windows and mall hallways. their list. And of course Perhaps now more than ever, it is important to help they'll appreciate how easy put your customers in a festive mood. Decorate your you made it for them. masthead, and jazz up your logo to reflect your store's holiday spirit. Entice customers to come in and shop You're likely already with captivating images such as delighted children using suggestive selling standing in the snow peering through toy store windows, techniques such as or delivering presents. "People that bought this product were also interested in…" at your checkout. And you may already use "May we help you find what you're looking for" tabs that allow the browser to state their shopping intentions on your home page. You may want to consider a Holiday specific design for these tools to remind customers that it is holiday shopping season: "May we help you with your Holiday shopping today? What Simplify the Buying Process Make it easy for your holiday shoppers by creating a key link from your home page (or on the home page itself) for “Holiday Season Gift Ideas". Of course the products you place here can also be found in their traditional departments, but anticipating your customers’ CDC eCommerce | White Paper 1
  • 3. gender and age group are you looking for?" "Would of promotions they offer in order to maintain a high level anyone on your gift list also be interested in this item?" of consumer satisfaction for their brand. Take advantage of your knowledge about your customers' shopping For those buyers that have practices, and tailor your promotions to suit their needs. a hard time making a choice For example, provide additional value to customers who for someone else, make sure spend a lot but shop infrequently by offering an exclusive you display your gift card item with every third purchase they make. Or for your options on all relevant pages. regular customers who buy lower ticketed items in greater You might also suggest that quantities, consider offers such as: buy one get one free, customers add one or two gift buy one for $20 or two for $30, or get 20% off the third cards to their shopping cart item. You may want to choose a special item sure to be for those last minute "Oops, a hit for the Season to give your loyal customers as a I forgot" presents, or just to reward when they are not expecting it. The pleasure they have on hand as host/hostess get from your surprise gift is sure to entice them to return gifts for those dinner party to your store for more—when they do, perhaps offer them invites! And place these friendly gift reminders at your choices for the free gift they'll receive for making new checkout too. Decorate the tab with lavish paper, bows, purchases. or stockings. Maybe have the gift card popping out of a partially Copyright 2008 CDC eCommerce Inc. Page Based on customer 5 of 19 Ringing in the Holiday Buyers in a Challenging segmentation, Economy opened gift box, or a stocking. An ideal option you may want for the procrastinating buyer who has run out of time is to create five or electronic gifting. more different promotions in order Notice to accurately target Eddie Bauer’s your audience. different style Make them feel options for gift special and show cards, and the your willingness one popping to help them play out of the Santa Claus by recommending products relevant to their stocking! personal shopping history. And when you've designed an offer that matches the shopper's buying appetite, let her/ him know it is a customized promotion. This will give your company an edge for that customer's satisfaction and loyalty. Of course you can also segment promotions according to section instead of general merchandising. Put your specific promotions into context with related products. For Get Creative with Incentives example, If you buy this stereo before December 12th, you'll not only receive a fifteen percent discount, but If your goal is to attract international customers to expand we'll apply the discount to headphones and speakers. your market this holiday season, why not consider offering at par dollars? Or perhaps offer to pay their duty? Also You can also offer geographic specific promotions as a for those far away shoppers, review your shipping costs reward to your loyal customer base, e.g., offer discounts to see what creative promotions you can design. Maybe to local purchasers. It is a good idea to summarize your offer shipping at the same cost as if they were within holiday services and place them on all relevant pages. For your borders. If you're example, remind the customer you are: trying to gain customers in geographic locations It is a good idea to summarize your holiday services and with high sales tax rates, place them on all relevant pages. For example, remind the contemplate "we pay the customer you are: tax" tax free promotions. • offering free gift wrapping as an option; In today's challenging • of the final ordering dates for shipping before economy, retailers need December 25th; to be creative with their sales strategies. Stores • of ordering deadlines for free shipping; need to vary the types • of multiple destination options for shipping; CDC eCommerce | White Paper 2
  • 4. • of free shipping on selected gift packages; ProFlowers offers 3 • free stocking stuffers with purchase programs, specials on its • of real store pickup availability and locations; home page— • and all other holiday specific promotions throughout delineating the store. each clearly and concisely. Are the advertisements you pay for giving you value for your money? Do they strike your audience in a compelling way? If they aren't singing out clear and accurate messages, maybe it's time to tune them up. Consider a review of your top ads to make sure they're doing the job for you this holiday season. Where are your Whatever promotional strategies you employ this Holiday advertisements taking your customers? Is it a place you Season, you will also want to make sure you haven't over- would like to go yourself? How well do your top terms estimated the efficiency of your site. Also, be sure that cover the products you are offering. More detailed terms you're equipped with relevant technology to support your may not attract as much traffic, but they will be more business. Next is a review of things to pay attention to as effective for conversion. Now is the time to test, test, test. the busiest shopping Season of the year fast approaches. They are divided into four key categories: Demand Attract new customers by offering new payment options Generation, Conversion of Browsers to Buyers, Increasing such as Bill me Later for emailed invoices or PayPal. Our Basket Dollars, and Improving Customer Loyalty. current economic climate promises to make this holiday buying season tougher than normal. The buy now, pay later approach is an effective tool for increasing that buyer B: Maximizing Your confidence and offsetting potential sales decreases. On-line Potential Shopping Engines Demand Generation Make sure your product/data feeds are on the highest The best place to start is usually at the beginning—getting rated comparison shopping engines e.g., Google Product buyers to your site. No doubt you've considered these Search, Shopzilla, Shopping.com, Yahoo! Shopping, recommendations in the past, but reviewing them just NexTag, MSN Shopping, PriceGrabber. Optimize search might spark your creative marketing juices! One of the engine advertising by choosing keywords for natural search characteristics of Holiday shoppers generally is that they that give the best descriptions for your products. The are often overwhelmed and harried this time of year. higher your page is ranked on Google, the better exposure So our first reminder is to keep your promotional offers you're going to get. You already ensure all administrative simple, easy, and quick to grasp. details are complete when you send your data feeds to comparison engines (e.g., product information with As you well know, social media can provide an interesting pictures, inventory, skus, part numbers, UPC codes, avenue for interaction with your most loyal customers, IBSN's), but you may want to add to these for the particularly when it is framed around seasonal topics Holidays: include, for example, your holiday promotions of interest. Video promotions and YouTube can also be and services, information about you as a merchant, and/ used to generate interest in your brand. Tread cautiously or your easy access to live service representatives. though—content for its own sake, or over-selling under the guise of social media can backfire quickly and drive savvy consumers away from your site. CDC eCommerce | White Paper 3
  • 5. Leverage 3rd Party Endorsements can physically see, touch, and manipulate the item; they feel the process for returning the product is too onerous; Helping customers feel they are they don't trust the online seller or the security of the site shopping in a credible place for their credit information; they aren't convinced they are can only improve their demand getting enough value for their dollars, and/or they find for your products. Be sure the shopping experience online too frustrating. No doubt you've prominently displayed the you've given this dilemma much consideration, but it never best seller lists on which your hurts to double and triple check that you've done all that company is named. Provide is possible to convert your browsers to buyers. We hope links to sites where they will find these helpful tips spur some new solutions for you. media reviews (e.g., as found on Chatelaine's top ten “Fashion Must Haves”), celebrity endorsements, Dare to Compare testimonials, and customer reviews of the top rated buys for the season. And just in case they get last minute jitters, remind them again on your checkout page. Engage the Long Tail Leverage your site and search engine data to engage the long tail. Remember that by creating multiple verticals based on your past successes, you'll expand your brand coverage in the marketplace. If you have a sound, scalable technology platform and marketing process, consider which brand extensions, new product lines, or long-tail verticals that you can cost-effectively launch to increase your market share this Season. All the data Helping your customers feel confident they understand you need (web analytics data, key search terms, high what they are getting with the product can be enhanced conversion products) is likely in your hands. If you don’t by on-site product comparison. It's a great tool to keep have the time to leverage vertical strategies leading up to consumers at your site where they can compare their the Holidays, use them to boost the post-holiday lull. choices side by side, and make decisions quickly and easily. And there's no better time than this holiday season to capitalize on the tendencies of consumers to Get the Most out of Affiliates comparison shop, when they're trying to stretch those Lastly, to further maximize market demand for your brand, dollars over multiple gifts. You may even employ the use review your affiliate management strategies. You may of Good- Better-Best Comparisons to help your browser want to do a tune up on relations beginning with more move into buying mode. It will get him/her thinking "which frequent communications during the holiday shopping one of these best suits my needs?" instead of "do I want season. Think about offering creative incentives and or need this?" working to improve their understanding of your brand. Review their management tactics, and be clear with Be Their Guide them about how you'd like your products managed, e.g., what promotions are/are not acceptable. Particularly pay Enhance your clients' buying experience and improve attention to your top five affiliates. Consider offering them conversion rates by providing guided navigation. When a higher reward—e.g., better deal than list price. Always used on product detail pages, for example, the left keep the terms of your program deals between you and navigation offers help to the shopper by refining their the individual affiliate. search by color, size, price, brand, or even powerful user ratings—all without more inbox searches or pull-down menus. You can also help them speed up their shopping Conversion excursion by giving them exactly the page they are Of those browsers who actually put items into a shopping looking for. Instead of landing on your homepage when, cart, Jupiter Research tells us that only 64% will actually for example, your top five items are Googled, create make a purchase—tough crowd. Why is this? Lack of specific "home" pages for each of these products. This consumer online comfort is by and large due to feeling personalization tool will improve your conversions, while unsure and unsafe. Shoppers don't get the confidence allowing you to focus on only a few variations of your from product information online that they get when they existing homepage. CDC eCommerce | White Paper 4
  • 6. knowledge of your products, increasing the chances of making him/her a buyer. These customer service options will also help keep customers from giving up when they encounter frustration at the checkout. Of course the efficiency with which you support these options is crucial. Immediately send acknowledgment of an email request for service, and if the representative cannot answer the shopper's question, let the customer know how long it will take to research and get the answer. Remember that delays will only add to the shopper's frustration, and increase the chance they'll Give your customers that shopping-in-person feeling by abandon the enriching your product information. Try using product shopping cart. finders, entertaining instructional videos on product use or installation, comparison charts, and glossaries to ensure Trust and Security your customers get all their questions answered. Also, Online shoppers have unlimited access to reviews of make sure your product information pages are clear and others' experience with your store. If you have a trusted easy to read—don't overload them with advertisements or store designation, be sure it is displayed on the higher other irrelevant materials. level pages of your site, and your checkout, as well as in your metatags and advertisements. You can further combat potential damage of your brand's reputation by ensuring you deliver comprehensive and dependable service pre-and-post purchase. Reassure your customer of hassle free return policies and procedures; post clear links on your site to customer support, FAQ's, product manuals, and warranty information, and proudly display any guarantees. Be sure to re-iterate this message when you send your order confirmation e-mail. Reassure your buyers that their sensitive data is safe on your site. Links to your privacy and security policies should be clearly labeled next to fields that ask for personal data, with a concise explanation of your policy. Include your privacy and security safeguards in user friendly terms. Make sure Help customers shop online the same way they do in you provide clear and easy access to company telephone person. Lancome’s Color Explorer lets you customize numbers and addresses. And of course, repeatedly place your make-up selection by color, and matches shades the names and logos of your security partners (e.g., to your selected skin tone. Hacker Safe and Thwaite) throughout the store, as well as displaying prominent security awards and associations Go the Extra Mile on Service (e.g., BBB, BizRate, McAffeeSecure, etc.) on both your Remove customer frustration and the likelihood of home page and checkout pages. shopping cart abandonment by offering live customer Another worry of online shoppers, particularly during the service. Make sure this option is displayed on all relevant holiday shopping season, is concern about receiving product pages, as well as at the checkout. And publish their orders in time. You can easily conquer this hurdle the hours of service representative availability on the by posting shipping deadlines on your home page and buttons. Click to chat Live Chat via email, or Get Live points throughout the checkout process. For those few Help (as seen here at the bottom of the Land’s End web shopping days left before Christmas when timely shipping page) options will improve your customers' comfort and CDC eCommerce | White Paper 5
  • 7. becomes questionable, consider listing your real store sooner than 24 hours are inadvisable, but 3 or 4 emails locations for merchandise pick-up or availability. If you're over the days and weeks following can have positive offering site-wide free shipping, make sure it is easy to results. Research indicates that as many as one in seven apply—without requiring numerous extra clicks to view online purchases take over a week to finalize. It is safe the details. to assume that one of the key reasons for the delay is that the shopper is comparison shopping. This is a prime opportunity, therefore, to offer staged promotions that grow over time. You can begin with offers like, free shipping on orders over $99, to order today for free shipping and save $X, and continue to escalate the discount to save shipping costs plus ten percent off your total cart. Mind the Cart The checkout is a very common abandonment point. Make your carts work for you. Try using interactive Notice the display of the item just added to the progress indicators e.g., Just $10 more and you'll receive shopping cart, is accompanied by the running total of free shipping. Add thumbnail images of items in the items and dollars spent, and the details of the other shopping cart to help the customer keep track of what items in the cart. they have, and maybe what they still need to get. Avoid the loss of customers from total price tag shock. Make sure customers can easily edit their orders without Carry forward the total value of items placed in the having to back track by several pages. Highlight error shopping cart to each page so the shopper can see messages during the checkout process next to the actual the subtotal. It is best to include estimates for tax and error to eliminate customer frustration. Try using graphics, shipping costs. and different colors. Be sure the messages are friendly and not demeaning. And remember to put your customer service information at common abandonment points. Wish Lists While the use of Wish Lists is a great tool to turn those cart items into purchases during the regular season, they can be an excellent strategy for improving sales in the Holiday Season. Help your clients take care of their shopping lists by offering the Wish List as a place to put items they'd like to buy as gifts, or for others to buy for them. Not ready to choose which items you'll buy for your kids yet (after all they're prone to changing their minds), no problem. Put your ideas onto your Wish List, and come back later when you're ready to pick. Use e-mail reminders to re-engage shoppers who have created Wish Lists, or who have seemingly abandoned This shopping cart provides a “remove” option to their shopping carts. Research indicates that emails make editing easy. CDC eCommerce | White Paper 6
  • 8. Increasing Average Order Value Remember that your customers' experience with your website can very easily reflect their loyalty to your brand. We've already discussed ways to promote higher This holiday season is a good time to review your site to quantities and dollars of sales this holiday season ensure it is up to date and consistent with best practices (see pages 1-6). Some general reminders to ensure for online stores. Jupiter Research shows that the ease you've maximized the value of the shopping cart are of navigation on a site is rated by 65% of customers as reviewed below. the most influential factor in their decision to continue shopping. Making your site easy and fun to use by getting Along with your "Holiday Season Gift Ideas" section, your customers to exactly where they want to go, arming consider organizing your items in fresh and unique ways. them with excellent product details, and moving them Proven suggestive shopping categories include: "New through the checkout effortlessly, will go a long way to Arrivals; Top Sellers, Shop by Theme, Shop by Style, improving customer loyalty. Also, make sure your brand Shop by Activity, and Shop by Fit, Small Spaces, For images online do justice to the real product. the Beginner, Performance Series:" Be sure to include all relevant promotional offers in these areas. Armani’s A/X Dressing Room makes choosing an outfit fun and easy, and gives the customer that Remind shoppers of items they have recently viewed in-store feeling by presenting the ensemble as it is through links to collection pages. They may have forgotten put together. to place some items they want into their shopping cart. And of course, stimulate their curiosity and excitement Your reputation for customer service will be improved by offering related products—"may we suggest a pair by representatives who are well trained in product of pants to go with your new winter coat". Make them knowledge, installation and service details, retailer and feel you're helping them finish that Holiday shopping—all dealer networks, and post purchase support issues. When in one easy spot! And consider making it easy for the customer knows they can rely on you, they'll come them to budget those extra dollars spent by deferred back again and again. payments—they're a big hit with many retailers during the holiday season. And of course, the obvious, make sure your customer feels you care. Send a Thank You email—"we appreciate Improving Customer Loyalty your business". For the Holiday Season, this is a logical tool to gain their shopping dollars—make them an offer For most people, Holiday shopping is not a one day exclusive to repeat customers. event. In fact, in can take several weeks to purchase numerous items for loved ones, business associates, Now that you're inspired with either confidence that your clients, etc. You'll want to create the best online shopping store is set for the holiday shopping season, or perhaps experience for your customers to keep them returning for armed with some new ideas to give you that extra edge, those still to buy items. And to remember your brand the and from everyone at CDC eCommerce we wish you all whole year through! the best of luck, and a very Happy Holiday! For more information or a complete list of our worldwide offices, please visit www.CDCSoftware.com/XXXXXXX Copyright © CDC Software 2010. All rights reserved. The CDC Software logo and CDC eCommerce logo are registered trademarks and/or trademarks of CDC Software.