The document discusses the challenges retailers face in improving online conversion rates, which remain in the 2-3% range, influenced by factors such as mobile device usage and customer preferences for consistent experiences across channels. It highlights key metrics affecting retail growth, such as revenue and traffic to sites, and emphasizes the importance of product photography, streamlined checkout processes, and effective merchandising strategies. Additionally, it outlines consumer behaviors and motivations, including the significance of free shipping and competitive pricing in driving loyalty and conversions.

1. THE E-TAILING GROUP
DOES CONVERSION MATTER?
-OR-SO
WHY IS CONVERSION NOT AS HIGH AS MY BOSS
THINKS IT SHOULD BE?
Presented by Lauren Freedman

2. The Voice of Cross-Channel Merchandising
Straight talk from “in-the-trenches” online merchandising experts
the e-tailing group
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 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

3. The Merchants: the e-tailing group 100 4Q13
1-800-Flowers Crutchfield J.Crew Orvis Sunglass Hut
Abt Dean & Deluca JCPenney Overstock.com Target
Amazon Dell Jos. A. Bank Party City The Body Shop
American Eagle Outfitters DICK’S Sporting Goods King Arthur Flour Patagonia The Children’s Place
Ann Taylor Discovery Channel Store L.L.Bean Petco The Home Depot
Apple DSW Lands’ End PetSmart Things Remembered
Aveda eBags Lane Bryant Pottery Barn Tiffany & Co.
B&H Foot Locker Lego Puma Title Nine
Ballard Designs Frontgate Lenovo QVC Toys ’R Us
Bare Escentuals GameStop Lowe’s Ralph Lauren Tumi
Barnes & Noble Gap Macy’s REI ULTA Beauty
Belk Garnet Hill Men’s Wearhouse Room & Board Under Armour
Best Buy Giggle Michael Kors Ross-Simons Urban Outfitters
Bloomingdale’s GNC Moosejaw Saks Fifth Avenue Victoria’s Secret
Blue Nile Godiva Neiman Marcus Sears Volcom
Chico’s Golfsmith Newegg Sephora Walgreens
Clinique Gucci Nike Shop PBS Walmart
Coach Harry & David Nordstrom Staples Williams-Sonoma
Cooking.com Hayneedle Northern Tool + Equipment Steve Madden Wine.com
Crate&Barrel HSN Office Depot Sundance Zappos
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the e-tailing group

4. CONVERSION IN AN OMNI-CHANNEL
the e-tailing group
WORLD
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5. Retailers challenged to maintain growth patterns against
Over the course of the past year (2013), how have the
following key site metrics been trending?
Top-2/Significantly/Somewhat Increased
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the e-tailing group
76%
68%
64%
49%
44%
87%
80%
70%
61%
44%
Revenue
Traffic to Site
Conversion
Average Order Size
Units per Order
2014
2013
Q14
formidable competitive landscape
e-tailing group 2014 Merchant Survey

6. Conversion rates still fall in the 2-3% range with mobile
likely impacting any upward trends
What kinds of conversion rates are you seeing on your
- PAGE 6 -
the e-tailing group
Q15
9%
20%
27%
12%
9%
4%
4%
4%
5%
4%
2%
6%
24%
22%
15%
9%
7%
1%
5%
1%
5%
5%
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
site?
2014
2013
e-tailing group 2014 Merchant Survey

7. Consistency across channels consumer preference
Retailers can make choices about delivering similar or
different experiences across any or all channels. Please
note what you believe should be consistent and where
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being different is not an issue.
Consistency Ideal
the e-tailing group
94%
92%
85%
79%
78%
69%
60%
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
e-tailing group/MarketLive 2014 Holiday Survey

8. - PAGE 8 -
the e-tailing group
Familiarity breeds conversion

9. The omni-channel shopper dynamics are in play but not
- PAGE 9 -
the e-tailing group
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

10. ….and store conversion is an acceptable reality for retailers
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Inventory noted by store
the e-tailing group
Reserve in store with
20-30 minute updates

11. The mobile shopping experience must be enhanced given
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the e-tailing group
existing barriers
UPS Pulse of the Online Shopper; 2014

12. Channel-centric merchandising must still be achieved
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website
the e-tailing group
mcommerce

13. Having the right photography with complete information and tools is
paramount to conversion
IMAGE & INFORMATION
the e-tailing group
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14. Product imagery is crucial to confidence building
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the e-tailing group

15. Retailers ratchet up search results with visual dynamics
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the e-tailing group
to build customer confidence
Product colors Product details
Kate Spade

16. - PAGE 16 -
the e-tailing group
Video can propel purchasing
Video: 89% EG100

17. Badged product gives product priority
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Online Only: 25%
the e-tailing group
Badging: 45%
Top Rated: 33%
e-tailing group 4Q13 Mystery Shopping

18. Retailers must make tactical choices in product, price and promotion and
content
MERCHANDISING
EXPERIENCES
the e-tailing group
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19. Understanding ROI is paramount
50 Features Ranked from an ROI perspective: Top-2/5: Very/Somewhat Important
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%
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the e-tailing group
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
e-tailing group 2014 Merchant Survey

20. Speed is everything for connected shopper
From search to checkout, fast matters
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the e-tailing group
(It counts more in mobile)
Visual Search: 29% EG100 One-Click Checkout: 43% EG100

21. Must-have product is in the eye of the beholder
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the e-tailing group

22. Inspiring merchandising counts
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Top Rated: 37% EG100
the e-tailing group

23. There are many ways to show must-have products
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the e-tailing group
Lookbooks: 22% EG100

24. Replenishable goods reap high conversion rates
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the e-tailing group

25. 93% of consumers take action to qualify for
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the e-tailing group
free shipping
UPS Pulse of the Online Shopper; 2014

26. Risk free and stress free shopping drives conversion
20% EG100 offer free shipping on
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all products
the e-tailing group
Online return processing : 27%
EG100

27. Sharp prices will be the greatest deterrent to shopping
at Amazon as all other reasons pale in comparison
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.
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the e-tailing group
74%
26%
22%
20%
17%
17%
17%
11%
10%
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
Q19
e-tailing group/MarketLive 2014 Holiday Survey

28. Buying and loyalty factors synonymous except retailer reputation, rewards
programs and personalization have greater sway in regards to loyalty
Now thinking about what ultimately makes you BUY/LOYAL
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the e-tailing group
80%
to a given retailer, how often do the previous factors
68%
54%
47%
44%
46%
contribute to brand loyalty?
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%
Always
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
Buy
Loyalty
Q14-15
e-tailing group/MarketLive 2014 Holiday Survey

29. Dedicate real estate to promotions
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 Savings center with
multiple promotions
 Preferred store
highlighted
the e-tailing group

30. Remove any checkout inhibitors
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the e-tailing group

31. - PAGE 31 -
the e-tailing group
Flexibility in policy performs
Satisfaction Guarantee: 66% EG100 PayPal: 62% EG100

32. One-click checkout ideal particularly in a mobile world
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the e-tailing group
Collapsible Carts: 20% EG100

33. Embrace newer service and selling scenarios
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Live Chat: 59% EG100
the e-tailing group

34. Price-related circumstances represent
4-out-of-5 top reasons shoppers abandon carts
After putting an item in your shopping cart, how often are you likely to
abandon that shopping experience?
Always
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the e-tailing group
64%
56%
52%
45%
44%
35%
28%
24%
24%
23%
19%
16%
11%
8%
8%
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 needs
Customer service details such as return policy were not forthcoming…
Trouble 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
Q16
e-tailing group/MarketLive 2014 Holiday Survey

35. Put shopping cart abandonment strategies in place
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the e-tailing group

36. - PAGE 36 -
the e-tailing group
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

37. the e-tailing group
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THE E-TAILING GROUP
773-975-7280
LF@E-TAILING.COM