Shopper Typologies toDrive Site Design andEcommerce StrategiesApril 25, 2012
Who Am I? Eric Paquette Senior Vice President Copernicus Marketing Consulting and Research Aegis Media
ERIC PAQUETTE, SVP (617) 449-4189 Eric.Paquette@copernicusmarketing.com
Background Expected Growth in eCommerce Sales for U.S. On-Line Retail Sales 2012 – Apparel and Accessories: +19.7% 224.2 – Books, Music, Videos: +18.0% 194.3 – Computers and Electronics: +15.9% 167.3 Source: eMarketer 155.2 +15.3% +16.1% While most of the top eCommerce sites are +7.8% retailers selling a mix of brands, several brand specific sites crack the Top 25 – Apple (#3) – Victoria’s Secret (#18) – L.L. Bean (#21) – Gap (#24) 2009 2010 2011 2012*
Ecommerce is also growing for brands that use retailers for distributionMore and more brands are expanding their direct on-line presence. Significantly higher margins Providing significantly expanded reach for distribution Provides access to customer data Opportunities to develop customer insights More and more, consumers expect to be able to buy brands directly
And brand websites provide a much richer brand experience
They are typically only a sub-set of brand buyersWhile direct on-line sales are increasingly important to brands, it is critical to realize that direct buyers havea distinct set of needs compared to general brand shoppers.The on-line shopping experience is decidedly different than a retail experience. That has implications for whois going to shop on-line in different product categories. % of Brand Buyers Who Buy Directly On-Line 26% Often 50+% of brand sales are directed to the site 4% for these shoppers
In fact, there are many types of ecommerce shoppers Broad Selection Browser/Researcher Retail Haters Latest & Greatest Family Provisioner Bargain Hunter
Understanding general on-line behavior doesn’t explain enoughAny given person can behave very differently with different brands or on different sites.
The mix and value of those shopper types depends on the category and brand Apparel Brand A Apparel Brand B % of Direct % of Direct % of Direct % of Direct Ecommerce Ecommerce Ecommerce Ecommerce Buyers Sales Buyers Sales 8% 14% 22% 44% 32% 25% 19% 16% 24% 27% 40% 18% 10% 22% 9% 8% 25% 10% 15% 12%
Understanding site users has wide ranging implications Website tone, look and feel Email/direct marketing strategies and tactics Site architecture Social and search tools and Site shopping tools strategies Availability / role of mobile site Site merchandising strategies Amount / role of branded content Pricing strategy vs. ecommerce
Start with surveys of site buyers Who are they demographically? How does the site compare to other sites / channels? What is their “brand” segment? Who do they shop the site for? What are their attitudes about shopping on-line? What is the “journey” when buying? What do they want when shopping for What devices are used when shopping? our brand? What current / potential site tools, What do they want from our site? content, etc. are desired? – Shopping experience – Product, price, etc. What are social behaviors for the brand? – Brand experience
Who do you survey?Our focus is on relatively recent buyers on the site…. Who are they? How and why have they shopped recently?We might include those interested in buying on the site…. If just developing an ecommerce presence If envisioning a significant overhaul of the site We would want on-line buyers in the categoryWe want to interview lots of them to provide strong links to customer databases…. Fortunately interviews from customer databases are inexpensive
Understand the basics of your on-line buyers is a first stepThe on-line shopper might not fit the stereotypical profile of the brand buyer potentially influencing the look,feel, and tone of your site.
Identify the segment that is most important to ecommerce sales Develop a Meaningful, Profit-Directed and Actionable Segmentation CREATE Hundreds of TEST Variables To identify 1. Attitudes characteristics PRODUCE 2. Site Needs of people who Optimal 3. Buying Behaviors are profitable Segmentation 4. Demographics for your 5. Brand Segment ecommerce Membership SITE 6. Database data 15
Who is Most Important? Using “predictive” characteristics to define segments leads to clear targeting. % of Direct % of Direct % of Direct Ecommerce Ecommerce Ecommerce Buyers Sales Profits 22% 44% 48% 19% 16% 27% 25% 18% 10% 14% 25% 9% 5% 10% 8%
What about the overall brand targets? The result is not the same, but ideally is generally aligned with the overall marketing targets for the brand. Ecommerce TargetsBrand Targets 20% 20% 35% Primary Target 50% 43% 30% 38% Secondary Target 30% 37% 40% 20% 27% Non-Target
The target segment drives the site design, tools, and site “positioning” The details of quantitative research are often embellished with qualitative research and Personas are developed to guide design teams. The Perfect Fit Hate-to-Shop Gifters Price Pilgrims Browsers Different Demographically Different Attitudes about Shopping On-Line Different in Terms of Who Buying For Different Devices Used to Shop Very Different in Needs/Wants Shopping 18
The site architecture driven by the needs of the target
The segments inform different tools as well Illustrative Case The Perfect Fit Hate-to-Shop Gifters Price Pilgrims BrowsersFeatured “Deals” New Product Features “Compare” Tool Return Policy Store Locator/Interaction Customer Service Hotline Breadth of Selection Customer Reviews Product Recommendations
Link the segments to your customer databaseProfile the segments with their database data…. Validating results of the survey Extending the information that is availablePredict segment membership using availabledatabase information…. Transactional and other data Historical 3rd Party DataEnabling segment specific direct marketingactivities.
Strategies and tactics can be used to address secondary targets as wellHistorical patterns in segment shopping behavior can identify seasonal opportunities Direct marketing opportunities Site “merchandising” opportunities Site pricing / sale strategies Share of Site Sales by Segment 50% 45% Hate to Shop 40% 35% Perfect Fit 30% 25% Gifters 20% 15% Bargain 10% Hunters 5% Browsers 0%
Linking the database enables segment-specific direct offersSegment specific offers can be developed, tested and tracked.
Recap Your web buyers are generally not the same as your overall brand buyers. There are many different types of on-line shoppers on your site. These groups have different wants and needs from that on-line shopping experience. Importantly, they also they also provide very different levels of profit potential for your ecommerce channel. Understanding the segments, and your ecommerce target provides clear guidance for your site design, strategies and tactics.
Mark Your Calendars! Wednesday, May 23, 2012 Mission Impossible: Profiling Shopping Occasions for Retail and Channel PartnersJeff MaloySenior Vice PresidentCopernicus Marketing Consulting and ResearchRegister Now: copernicusmarketing.com/webcastsWednesday, May 23, 2012
ERIC PAQUETTE, SVP (617) 449-4189 Eric.Paquette@copernicusmarketing.com