• by Jack Loechner , Staff Writer @mp_research, April 23, 2012

According to new Whitepaper by the e-tailing group and Baynote, among surveyed merchants rating their top merchandising and navigational tactics for customer retention, evaluating analytics to see what works topped the list with 93% of retailers recording a top-2 score (most important/somewhat important). In fact, 61% rated it as “most important,” sending a clear message about the mission critical nature of “Measurements: to understand how merchants are thinking about metrics today, and futuristically.”

The whitepaper, “Metrics Therapy– Details, Dashboards and Diligence.”  released on 4/23 by eTailing/Baynote Metrics, belies a “brief” Research Brief, but perhaps a glance at some relevant findings and an “almost” TOC will lead interested readers to link to additional detail found in the complete report.

Most merchants struggle to maintain the right measurements to drive business, including having ample resources to review statistics in the detail necessary for wise decision-making, says the introduction. As devices and social dynamics accelerate, metrics are emerging to meet the needs of marketers. As cross-channel selling plays a more integral role for retailers and tracking across touch-points becomes even more crucial, this topic is explored in the study. Taking a holistic view of the numbers and one’s customers will be imperative as competition remains fierce and consumers continually demand more in their shopping experiences, says the report.

The study addresses the most important metrics for running a business. Five key areas emerge, with suggested subsets, with “profit”the one universally constant across channels, making it the weightiest metric.

Conversion continues to get significant attention within business units and among senior management as this singular number serves as a critical directional indicator. Beginning with insights from the Annual Merchant Survey, 52% of merchants are seeing conversion in the 1-3% range. Relative to 2011, these results indicate that somewhat lower conversion rates are being seen across-the-board.

When asking over the course of the past year (2011), “How have the following key metrics been tracking,” 60% of participating merchants reported somewhat/significant increases in conversion. Similar stories throughout the interviews were found as merchants continue to refine the customer experience and drive more qualified traffic to the site, where positive results are forthcoming.

The report expands on understanding these metrics in the context of individual businesses:

• Shifting Priorities Alter Conversion Numbers
• Promotions and Profitability Goals Impact Conversion Numbers
• Mobile Wreaks Havoc on Numbers
• The Traffic Factor - Many Ways to Read
• Assortment Challenges
• Focus on the Customer Experience
• Conversion Influencers
• The value of testing
• Dynamic Merchandising Delivers Desired Conversion
• Accelerated Promotions
• New Warrants Attention and Feeds Desire
• Assortment’s Role in Elevating Conversion
• Personalization/Segmentation
• Assessing the Role of AOV

The pace-of-change requires retailers to deliver on a real-time basis where end-of-month numbers do not provide sufficient lead time to adapt and meet the concerns of connected customers. Additionally as channels and devices proliferate, increased measurement complexity grows exponentially. Based on these evolving circumstances, along with retailers’ desire for a more holistic view of their business and their customers, a brief discussion of mobile, social and cross-channel dynamics plus their supporting metrics is in order.

Generally, skepticism and many contradictions surround social for retailers where learning and waiting best describes merchant sentiment. Efforts center on testing but most reported traffic does not result in sales, therefore metrics have been less of a focus to date. Some merchants do believe that social may drive branding so understanding engagement has drawn attention, despite being difficult to measure. When a product or brand goes viral the impact is clearly evident but standard measurements are not employed. Retailers might have tried to compare the results, but wisely view it as a different way of managing information, more along the lines of a publicity or public relations brand-play.

The ultimate situation for retailers is to have a 360-degree view of the customer with a goal of comprehending both interactions and transactions across all touch points, says the report. Contact strategies are under considerable scrutiny as retailers seek to understand the most cost effective ways to reach their customers and drive conversion.

Each retailer has a unique approach for securing and sharing metrics within their organization, and these tactics can readily be adapted within any organization, says the report. As one technology manufacturer contributed, “Establishing shared goals across the organization versus a more siloed mentality is a requirement for effective analysis.”

The report concludes by detailing a suggested outline, or “playbook,” to assist the merchandising community in planning  metric measurement. To make sense of the insights and the anecdotes shared by the retail community, a playbook for embracing metrics was constructed that is meant to inspire any merchant to revisit their vision.

• Align goals
• Run company like it’s small
• Meet reguarly: the monday meeting and more
• Standardize definitions prior to analysis
• Focus on the action needed by moving beyond the numbers
• Educate internally
• Provide holistic view of information
• Invest in data warehouses
• Dialogue and discuss

To download the complete white paper and a free copy of “A Merchant’s Metric Playbook” please visit here.  Or, go here to register for the “Metrics Therapy for Merchants” on Wednesday, April 25^th, go here. You can also find an InfoGraphic here.