CDC Software eCommerce - white paper


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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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CDC Software eCommerce - white paper

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