According to the 2006 Multichannel Marketing in the Catalog Industry Report by the US Direct Marketing Association, US catalogue merchants expect to get 44% of their 2006 direct sales via the web, up from 39% in 2005 and 38% in 2004.
But don't think that this means that print is dead - far from it! The same report shows that although respondents estimated that 40% of web sales were incremental, 74% of respondents considered their catalogue to be the primary sales vehicle.
As Digivate has consistently argued for the last 10 years, all channels have role to play. The trick is to focus each channel on what it does best, and to consider each new channel's strengths and weaknesses before deciding how to exploit it.
Friday, December 15, 2006
Bad websites could make you ill
A recent survey by The Social Issues Research Centre found that most test subjects forced to interact with abysmal websites displayed symptoms that could lead to stress related conditions.
“Some changes in muscle tension were quite dramatic…While this was happening, the participant's faces also tensed visibly, with the teeth clenched together and the muscles around the mouth becoming taught. These are physically uncomfortable situations that reduce concentration and increase feelings of anger”
So a good website isn't just good for the merchant's financial health - it is also good for the health of the customers!
“Some changes in muscle tension were quite dramatic…While this was happening, the participant's faces also tensed visibly, with the teeth clenched together and the muscles around the mouth becoming taught. These are physically uncomfortable situations that reduce concentration and increase feelings of anger”
So a good website isn't just good for the merchant's financial health - it is also good for the health of the customers!
Wednesday, December 13, 2006
Online shoppers driven by convenience more than price
A new report by Questus shows that just over three-quarters of the 575 US shoppers surveyed said they shop online to save time, two-thirds cited the ability to shop 24/7, and three-fifths liked the lack of crowds. Just under half said they shopped online to save money.
All this shows that it is convenience not price that is the main driver of online shopping, despite the two-thirds saying that better prices would increase their likelihood of buying online.
Underscoring this conclusion are the figures for various changes that respondents said would increase their propensity for buying online:
38% - better product descriptions,
35% - better pictures,
35% - no registration,
31% - easier navigation, easier checkout and better return policies,
25% - reviews and customer ratings.
Action: All the items on this wish list are within your reach. They don't even require much investment, just some attention.
All this shows that it is convenience not price that is the main driver of online shopping, despite the two-thirds saying that better prices would increase their likelihood of buying online.
Underscoring this conclusion are the figures for various changes that respondents said would increase their propensity for buying online:
38% - better product descriptions,
35% - better pictures,
35% - no registration,
31% - easier navigation, easier checkout and better return policies,
25% - reviews and customer ratings.
Action: All the items on this wish list are within your reach. They don't even require much investment, just some attention.
Waitrose capturing market share online
According to a report by Lightspeed Research, Waitrose has 14% of the online grocery market yet only 2% of the offline grocery market.
This shows how important it is to look at market share. Anyone looking at turnover would think that Tesco was doing pretty well online, but the figures show that Waitrose is punching above its weight on the Internet.
Action: Look at how your site compares to your competitors. If you're not better than them you're probably losing customers.
This shows how important it is to look at market share. Anyone looking at turnover would think that Tesco was doing pretty well online, but the figures show that Waitrose is punching above its weight on the Internet.
Action: Look at how your site compares to your competitors. If you're not better than them you're probably losing customers.
Monday, December 04, 2006
UK consumers want mobile web now
According to recent research by Harris Interactive, 51% of 16-24 year olds would prefer to access the internet via their mobiles. Given the apparently permanent connection between the young and their handsets, this doesn't surprise me.
Yet as I wrote in my blog of a few days ago, very few brands have mobile ready versions of their websites. Given that sooner or later all brands will need a mobile site, why not start now?
Yet as I wrote in my blog of a few days ago, very few brands have mobile ready versions of their websites. Given that sooner or later all brands will need a mobile site, why not start now?
Thursday, November 30, 2006
US research: consumers ready for mobile shopping, merchants aren't
Recent US research by Boston based consultants Molecular shows that whilst US consumers are ready to buy using their mobiles, the sites just aren't up to it.
As a recent user of the mobile web, I too get very frustrated by how few sites have mobile versions. The Google one is the only one I've found that is specially designed for the reduced screen size of a mobile device. Even Barclays Bank doesn't have a mobile specific version of their site, meaning that although it can be used, the process involves endless scrolling left and right as well as up and down to see the pages.
My bet is that UK consumers are even more ready to transact online than their US cousins.
Lysander Meath Baker
As a recent user of the mobile web, I too get very frustrated by how few sites have mobile versions. The Google one is the only one I've found that is specially designed for the reduced screen size of a mobile device. Even Barclays Bank doesn't have a mobile specific version of their site, meaning that although it can be used, the process involves endless scrolling left and right as well as up and down to see the pages.
My bet is that UK consumers are even more ready to transact online than their US cousins.
Lysander Meath Baker
Wednesday, November 22, 2006
Consumer generated videos boost sales
ShopWiki, a US comparison shopping engine, started a campaign to add user-created product videos to product pages in July this year (2006). Kicked off with an offer of $50 (about £26 at today's exchange rates) for the first 500 videos submitted, ShopWiki is considering extending the offer to all videos. There aren't any figures for the effect on sales of the videos but ShopWiki makes its money from accepting Google ads so can't measure sales.
Not all products are enhanced by the addition of video, but for some it could be a godsend - take a look at the latest Tickle Me Elmo (http://www.shopwiki.com/wiki/Elmo) - I'm sure you'll agree that this will help you decide whether you want one in your house...
Action: If creating your own videos seems too daunting & expensive then why not copy ShopWiki and simply offer your customers cash or vouchers for uploading theirs? The results might be uneven but they'll have an authenticity you can't match for a cost that can't be bettered.
Lysander Meath Baker
Not all products are enhanced by the addition of video, but for some it could be a godsend - take a look at the latest Tickle Me Elmo (http://www.shopwiki.com/wiki/Elmo) - I'm sure you'll agree that this will help you decide whether you want one in your house...
Action: If creating your own videos seems too daunting & expensive then why not copy ShopWiki and simply offer your customers cash or vouchers for uploading theirs? The results might be uneven but they'll have an authenticity you can't match for a cost that can't be bettered.
Lysander Meath Baker
Wednesday, November 15, 2006
Email outclasses all else
According to the US Direct Marketing Association, promotional emails yielded a staggering $57.25 for every dollar spent in 2005. In contrast, $7.09 came from each dollar spent on print and $22.52 from dollars spent on other internet marketing. You can read more about this research on DirectMag.com.
This shows how important it is to collect email addresses from your customers.
But email is no good as a prospecting tool, so don't give up printing catalogues and ads. You'll always need to find new customers as well as sell things to existing customers.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
This shows how important it is to collect email addresses from your customers.
But email is no good as a prospecting tool, so don't give up printing catalogues and ads. You'll always need to find new customers as well as sell things to existing customers.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Almost all affluent buyers research online
Recent research published on eMarketer.com shows that 93% of affluent US consumers research electronics purchases online, most using both search engines and product websites. These people are also buying many of their electronics online.
How long will it be before all major purchases start with an online research session?
We're still coming across up-market retailers who insist that their customers don't want to buy online, and that online shopping is all about discounts. But this study shows that all brands should be creating information rich websites geared towards researchers, even if they don't want to sell their brand online.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
How long will it be before all major purchases start with an online research session?
We're still coming across up-market retailers who insist that their customers don't want to buy online, and that online shopping is all about discounts. But this study shows that all brands should be creating information rich websites geared towards researchers, even if they don't want to sell their brand online.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Tuesday, November 14, 2006
Search spending is NOT 'advertising'
A recent report from Jupiter Research (written about on eMarketer.com) examines the European online advertising market. Jupiter projects that 49% of online ad spend will be search spend by 2011, rising from the current 41%.
Surely search spend is NOT advertising? Apart from anything else, the figures only look at Pay-Per-Click (PPC) and don't take into account the fact that search spending - from a merchant's point of view - will include money spent on site optimisation and link building campaigns.
The whole point of online marketing is that it should be fully accountable and linked directly to sales. Advertising - to me - is a more general promotional activity.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Surely search spend is NOT advertising? Apart from anything else, the figures only look at Pay-Per-Click (PPC) and don't take into account the fact that search spending - from a merchant's point of view - will include money spent on site optimisation and link building campaigns.
The whole point of online marketing is that it should be fully accountable and linked directly to sales. Advertising - to me - is a more general promotional activity.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
1 week's matchback increases email response by 40%
A recent promotional email for a client proved the importance of matchback analysis.
7 days sales from visitors who had clicked on links in the email provided a conversion rate of 1.35% - but by looking at the email addresses of orders placed by customers who had navigated directly to the website added an extra 0.54% of conversion. The analysis was unable to include those customers who ordered over the telephone, and ended only 7 days after the email went out, so the real figure for the sales generated by the email campaign was probably even higher.
The average turnover from the one email campaign was £3.12 per email address on the list (not just emails delivered). This gives some idea of the value of having a large email address file!
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
7 days sales from visitors who had clicked on links in the email provided a conversion rate of 1.35% - but by looking at the email addresses of orders placed by customers who had navigated directly to the website added an extra 0.54% of conversion. The analysis was unable to include those customers who ordered over the telephone, and ended only 7 days after the email went out, so the real figure for the sales generated by the email campaign was probably even higher.
The average turnover from the one email campaign was £3.12 per email address on the list (not just emails delivered). This gives some idea of the value of having a large email address file!
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Thursday, November 09, 2006
Customer pictures good addition to reviews
Not many UK ecommerce sites feature customer reviews, but US best practice has already moved a step forwards. Take a look at EvoGear where customers are being encouraged by the prospect of a $1000 cheque to add pictures to their reviews.
Converting a visitor to a customer is all about providing answers to all the visitor's questions, and reassuring the visitor that their fears about what could go wrong are unfounded. Reviews are a great tool for doing this and adding pictures is clearly the way forward.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Converting a visitor to a customer is all about providing answers to all the visitor's questions, and reassuring the visitor that their fears about what could go wrong are unfounded. Reviews are a great tool for doing this and adding pictures is clearly the way forward.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
77% of US electronics customers research online
The US Consumer Electronics Association (CEA) and Yahoo! revealed recently that 77% of surveyed consumers do online research before buying any of 5 specified electronic items.
The interesting question is: what stops these researchers from actually buying online? And more to the point, can we use these figures to predict that 77% of electronics purchases will one day be online?
Mail order companies long ago concluded that personality type was the key to sorting the heavy home shopper from the average mail order hating consumer. Both groups explained their channel preference by saying 'it is just easier'. It is clear that by reducing uncertainty ecommerce has increased the percentage of the population who've had a good experience home shopping. But the fact that 77% of buyers are researching online yet far fewer are actually buying online shows that ecommerce still seems risky to most people. Whether it is the risk of ID theft or the worry that online pictures don't give an accurate impression, fear is holding back millions of potential online shoppers.
We think: The dramatic growth of ecommerce isn't going to slow down soon. As this study shows, the vast majority of consumers are now researching online. As every year passes, more and more will try shopping online. Most will have a positive experience and this will lead to more online purchases. In the meantime, retailers should add suitable content to their websites to engage and help the inevitable online researchers, and offer enticing promotions to help get resolute offline buyers over the 'fear barrier'.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Source: CEA - Yahoo! survey
The interesting question is: what stops these researchers from actually buying online? And more to the point, can we use these figures to predict that 77% of electronics purchases will one day be online?
Mail order companies long ago concluded that personality type was the key to sorting the heavy home shopper from the average mail order hating consumer. Both groups explained their channel preference by saying 'it is just easier'. It is clear that by reducing uncertainty ecommerce has increased the percentage of the population who've had a good experience home shopping. But the fact that 77% of buyers are researching online yet far fewer are actually buying online shows that ecommerce still seems risky to most people. Whether it is the risk of ID theft or the worry that online pictures don't give an accurate impression, fear is holding back millions of potential online shoppers.
We think: The dramatic growth of ecommerce isn't going to slow down soon. As this study shows, the vast majority of consumers are now researching online. As every year passes, more and more will try shopping online. Most will have a positive experience and this will lead to more online purchases. In the meantime, retailers should add suitable content to their websites to engage and help the inevitable online researchers, and offer enticing promotions to help get resolute offline buyers over the 'fear barrier'.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Source: CEA - Yahoo! survey
Wednesday, November 08, 2006
Ecommerce impact downplayed by Retail Think Tank
The newly formed Retail Think Tank (RTT) has just announced that "Online retailing is unlikely to become the mainstream channel of UK retail". Who said it would?
This is simply shooting down a straw man - I don't know any serious commentator who would claim that ecommerce was likely to represent more than 50% of UK retail in the foreseeable future.
The report goes on to say that ecommerce is a variety of home shopping and as many online orders have simply switched from catalogues, stories of the growth of ecommerce shouldn't be taken too seriously.
At Digivate we have always said that the crucial split is between whether the product is delivered or collected, not between whether the order is placed online or by some other method. Ecommerce has had a huge impact on the proportion of sales that are delivered - in some categories, notably electronics, a massive percentage of retail sales are now delivered.
To any retailer who thinks that this report gives them an excuse to ignore selling online, I have news. Ecommerce doesn't need to become the "mainstream channel" to be a threat to high street stores. And any analysis of the impact of ecommerce has to look at promotion as well as transaction.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Source: KPMG/SPSL RTT quoted in Retail Week
This is simply shooting down a straw man - I don't know any serious commentator who would claim that ecommerce was likely to represent more than 50% of UK retail in the foreseeable future.
The report goes on to say that ecommerce is a variety of home shopping and as many online orders have simply switched from catalogues, stories of the growth of ecommerce shouldn't be taken too seriously.
At Digivate we have always said that the crucial split is between whether the product is delivered or collected, not between whether the order is placed online or by some other method. Ecommerce has had a huge impact on the proportion of sales that are delivered - in some categories, notably electronics, a massive percentage of retail sales are now delivered.
To any retailer who thinks that this report gives them an excuse to ignore selling online, I have news. Ecommerce doesn't need to become the "mainstream channel" to be a threat to high street stores. And any analysis of the impact of ecommerce has to look at promotion as well as transaction.
Lysander Meath Baker
Digivate - Ecommerce website design and online marketing
Source: KPMG/SPSL RTT quoted in Retail Week
Saturday, November 04, 2006
Abacus: 25% of home shopping now online
The latest Abacus trend report shows that the percentage of home shopping sales via websites has gone up from 20% in 2004 to 25% in 2005. Average order size is once again slightly higher online than on the telephone.
I don't think Amazon or eBay are Abacus clients so the 25% figure probably under-represents total online sales. Some long established catalogue merchants have reported up to 55% of orders taken online; if the average is 25% then many merchants must have underperforming websites.
Action: Find a way to measure or estimate cross-channel effects. For example, unless you know how many customers read your catalogue before ordering online you won't be able to assess the profitability of your catalogue.
Read the Executive Summary of the Abacus Report
I don't think Amazon or eBay are Abacus clients so the 25% figure probably under-represents total online sales. Some long established catalogue merchants have reported up to 55% of orders taken online; if the average is 25% then many merchants must have underperforming websites.
Action: Find a way to measure or estimate cross-channel effects. For example, unless you know how many customers read your catalogue before ordering online you won't be able to assess the profitability of your catalogue.
Read the Executive Summary of the Abacus Report
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