Up and down, up and down. The common yardstick used to measure performance is retail sales: Are they up or down and by how much? As marketers what we
also need to measure is how we are doing
against other critical benchmarks that will help move unwanted post-holiday inventories and drive successful marketing strategies in 2009.
We need to ask ourselves: Am I positioned competitively
online? What is working best for my competition? How can I reduce shopper abandonment? So, here is a New Year's resolution to consider if you haven't made yours yet: I will understand how my
business measures up against rivals each month.
The secret (shush!) in accomplishing this resolution is accessing shopping insights culled from consumers' online shopping and purchase
activities across the web, including rival Web sites. A large diverse online panel (with millions of consumers) will yield the insights needed to make a measurable difference in post-holiday
marketing strategies and performance.
So, what should retailers be looking at to make a difference in their post-holiday marketing? Here are three examples of online shopping insights:
1. Do you know where your customers are bargain hunting for holiday clearance items?
Tracking the sites and content that pose the greatest threat is an important starting point for
positioning competitively online. An excellent place to start is by understanding the degree to which your customers and potential customers consider rivals -- i.e. how much they cross-shop --
and how that changes over time as you implement new marketing strategies. For instance, imagine if you knew that December visitors to Kmart.com were 15% more likely to also visit Walmart.com than
Target.com. Now imagine that you also knew what they were shopping for on Kmart.com and Walmart.com. Cross-shopping yields a deeper understanding of the online competitive landscape and the
effectiveness of online marketing efforts -- yours and your rival's. 2. Are you attracting the right shoppers with messaging or do they "click and run?"
Effective acquisition
strategies mean targeting the right shoppers -- those in your sweet spot that are most likely to make a purchase. Look at your search engine marketing campaign to benchmark your Search Bounce
Rate to top department stores and mass merchants. The percent of visits to rival sites in December that were referred from a search engine and resulted in a shopper immediately leaving the site
(i.e., "click and run") ranged from 3% -- 18% (qvc.com and Overstock.com respectively). How did you measure up? Identifying the actions to take to reach parity with "best in class" can translate
into significant gains.
3. Are you better than average at converting shoppers who start the online purchase process? Not every customer who begins the online purchase process on your
site will complete it. For obvious reasons, however, you want to maximize the number that do. Let's say you are the CMO of Kohl's. Nearly one in three online checkout sessions in December were
abandoned compared with only one in four at Macy's.com. Identifying specific steps in the online purchase process where the share of shoppers who defected was above that of rivals, along with the
insights to understand why, can have a huge impact. If you assume an average online purchase price of $50, a one percentage point improvement in the percent of Kohl's visits that result in a
purchase would yield an additional $60 million annually in online sales. Now that's a yardstick worth using.
And finally, remember to measure up. As we close the book on the 2008 holiday
season and firm up 2009 targets, remember that shoppers are worth more than the sum of their purchases, and insights derived from online shopping and purchase activity across the web can help you
benchmark to industry "best in class" and accelerate marketing performance.
Data for this piece was drawn from Compete's Retail and Consumer Products practice.