E-Tailers Step Up Analytics To Better Compete

online shopperAs consumers continue to look for ways to shop smarter, they're still buying clothes online. A new survey done for Google by Compete shows that purchase conversion rates for people shopping for apparel held its own in January, and even increased slightly in February. But they're taking their time before buying, says John McAteer, Google's director of retail.

"A year ago, consumers on average would click twice or three times before making a purchase. Now, it's four to six times," he says. The percentage of clothing purchased within the first two weeks of the search fell 1.2 percentage points.

"For retailers, that means that it's important to use analytics that get at what different types of customers are responsive to -- is it price? Assortment?" If it's taking shoppers that much longer to buy, he says, advertisers have to be more precise and efficient, making sure they are advertising on the niche sites that will help them find their best prospects.



The ones that do -- particularly smaller companies that can be much more nimble about finding market segments -- are faring much better, he says, seeing strong results despite challenging times for the retail sector.

In fact, he says, the success of these smaller companies online are changing the way the giant brick-and-mortar stores approach their online business. "The retail marketplace is getting larger every day," he says. "Macy's, Penney, Wal-Mart, Best Buy -- these stores have traditionally tended to see their competitive set as a small group, and benchmark themselves against those competitors. But the little retailers selling online are growing at a much faster rate than larger chains," he says, forcing bigger stores to scramble to track that business.

At the same time, they still need to track how well they are doing in their own Web site, including how well their online advertising is doing at driving Internet sales business. And, of course, there's still the question of the overall marketplace -- retailers need to know how online behavior is impacting physical stores," he says. "Most retailers don't do well on all three measures."

One of those little merchants is Lindland's Cordarounds, a San Francisco-based clothing company that sells horizontal -- rather than vertical -- corduroy pants. While its products -- which include a popular bike-to-work pant -- are sold by the hundreds, not the thousands, by using Google Analytics to better target the right demographic for the quirky duds, the company saw a 200% return on its holiday spending.

And recently, when it introduced a pair of blue-and-white starred "All American" pants, it sold out in a matter of hours, says founder Chris Lindland -- a first for the company. Using the right tools, he says, "gives me a quick snapshot of how people are interacting with my brand, what they're saying on blogs, how that's driving my traffic and who's buying."

In the looming back-to-school and holiday seasons, McAteer says, those insights will be more important than ever: "For online merchants, finding a way to close the deal more quickly -- and enticing even the most frugal shoppers -- is going to be critical."

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