Friday, August 14, 2009

Report: online shoppers hunting more, paying less

A recent survey into US online shoppers has identified some interesting behaviours and attitudes, many of which are likely to be shared by UK consumers.

Three in particular drew my attention:

- Web surfers are spending more time hunting for bargains than they were six months ago.
- Many shoppers don’t seem to realise where they’re buying – 17% claim to have bought from a search engine and 7% from a comparison site.
- Free shipping is the feature most likely to influence buying, followed by product ratings or reviews.

The first finding shows the fragility of building a business based on gathering traffic from search engines and comparison shopping sites; many of the sales made via this route will be from consumers who won’t buy again. There is no point ‘buying customers’ if the result is one-time purchasers. Many home shopping experts only regard a prospect as being converted into a customer after the second purchase.

A multi-channel approach to prospecting and reactivation is vital. This means that the traditional key benchmark for mail order businesses – the size of the ‘house list’ (number of unique active customers) – is still the best indicator of a healthy home shopping company in 2009. To bring the concept up to date, just include email addresses as well as postal addresses.

The second finding shows the importance of effective branding across all the material seen by customers, from web site to packaging to order notification emails. A whopping 17% of those surveyed thought they had bought from a search engine, so some merchants must be failing dismally. If even your customers haven’t heard of you, then you have a branding problem.

The third finding shows that even if you don’t offer free shipping to all your customers then you should at least offer free shipping with conditions such as a threshold spend. And it would probably be sensible to run a test to see if free shipping gained more in profits on new sales than it lost in costs.

Anyone who wants to download the full survey can do so here

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