According to the e-tailing group's 8th Annual Merchant Survey in the first quarter of 2009, 34% of surveyed merchants anticipate that their Internet revenues will be down or flat in 2009 versus
2008. The balance of respondents continue to see growth but only 39% project revenues up in the 1%-15% range.
Lauren Freedman, President of the e-tailing group, notes that "... 190
senior level merchants with e-commerce responsibility... recognize that the online channel is core to multi-channel success... (as) the pressure for performance is greater than it has ever been...
(while) customers demand more... "
Impact of Economy on eCommerce
Investments |
Response | % of Respondents |
No change | 8% |
More than 2008 ("fastest growing part of
business") | 36 |
Same as 2008 | 26 |
Less than 2008 (current business state) | 22 |
Significantly less
than 2008 | 8 |
Source: eTailingGroup, April 2009 |
?With conversion numbers trending down, merchants are challenged to get customers to convert, but viewing other success metrics and benchmarks in the broader context of
multi-channel shopping. In the 2009 model, researching, comparison shopping, and seeking store information may be as prevalent as purchasing online, though their impact is not factored into conversion
numbers.
Conversion Rate Comparison to Prior Year (% of Respondents) |
| 2008 | 2007 |
Significantly higher | 12% | 6% |
Somewhat higher | 30 | 45 |
About
the same | 21 | 24 |
Somewhat lower | 32 | 14 |
Significantly lower | 3 | 3 |
Don't know | 2 | 8 |
Source: eTailingGroup, April 2009 |
More so than in
prior years, customer behavior may significantly impact performance as shoppers are slower to purchase, limit purchases, as well as research both product and price before making commitments. Testing
is central to understanding what works in this climate where analytics and performance data substantiate decision-making. Sources of information to make merchandising decisions now rely on:
- Analytics (92%)
- Sales history (73%)
- Conversion data for (68%)
- Competitive benchmarking (50%)
- Customer ratings/reviews cited by (39%)
As merchants tweak their sites for optimal performance and ROI there is continued emphasis on targeted email, refining onsite search and upgrading site design including enhancing
onsite merchandising.
Selected Initiatives Planned for Improved Website Performance
in 2009 (Multiple response OK) |
Planned Initiatives | % of
Respondents |
More targeted email | 76% |
Adding/improving onsite search | 69 |
Site design/upgrades | 67 |
Enhanced merchandising features | 65 |
Cross selling/Up selling | 55 |
Content development | 52 |
Add customer generated content | 49 |
Overhaul shopping cart | 45 |
Personalization | 41 |
Source: eTailingGroup, April 2009 |
These diverse initiatives, added to
the survey this year, reflect the current merchants' mindset as they look in every direction for site
improvement:?
- 51% A/B
Testing?
- 44% Social
Networking?
- 39% Content Management
?
- 39% Alternative Payments
Customer retention and top
ranking customer service tactics include:
- 58% who say site redesign/enhancements
- 50% pricing/promotional strategies
- 47% exemplary customer service
- 41% targeted and/or segmented email campaigns
- 31% streamlined checkout
Versus 2008, little change was seen in the order of ranking, but the most relevant
metrics did receive greater endorsement. The top five ranking features as "very to somewhat valuable in 2009" are:
- Keyword search... 94%
- Sales or specials...
93%
- Cross selling... 92%
- Email merchandising... 90%
- Seasonal promotions... 88%
Targeting and segmentation via email are important as merchants
ratchet up efforts from personalized to triggered email including abandonment efforts. Additional key steps merchants are taking to improve email performance include:
- Better
segmentation... 76%
- Compelling messaging... 80%
- Improved creative... 73%
- Increased focus on analytics with A/B testing... 64%.
44% of these
merchants anticipate changing e-commerce platforms within three years, but 42% report that they have no plans to make such a change. Given current resource constraints and economic instability, the
report concludes that tweaking will be the order of the day.
Freedman summarizes by saying "Platform upgrades may be on many wish lists but 2009 will be remembered for refinement of
navigation, onsite search and website tweaks... "Merchants who truly optimize e-commerce and multi-channel potential... will... thrive as the dominant players in their categories."
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