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Nov 05, 2001
Article

4th Quarter Online Merchandising Research Results: 100 Online Retailers Reviewed

SUMMARY: Every quarter the e-tailing group publishes a new report examining how famous online retailers are putting best-practices into action (or not.)  Normally their latest report wouldn't come until after Thanksgiving . but we sweet-talked them into letting us bring you a Sherpa-readers-only preview.
For MarketingSherpa readers only -- here is the invaluable four-page summary of the the e-tailing group's 4th Quarter 2001 Merchandising Scan of 100 e-commerce Sites.

Note: Timely features & functions that could help merchants improve sales – online and offline – this holiday season are identified with seasonal snowflake * bullets.

Sample:
Starting with 4Q 1998 this study has been conducted by scanning 50 sites each 2nd and 4th quarter. For the 4Q 2001 the study sample size was doubled to include 100 sites. The merchant list varies somewhat from study to study, reflecting the evolution of online selling. Specifically the composite of more recent scans includes fewer pure play Internet sites and more Multi-Channel merchants. Note that Auctions, Groceries and Travel have not included in these studies.

100 e-commerce sites representing a cross section of merchants selling leading consumer product categories online including:

- Accessories
- Department Stores
- Mass Merchants
- Apparel
- Drugstores
- Office Supplies
- Auto
- Gifting
- Pets
- Books/Music
- Health/Beauty
- Sporting Goods
- Computers
- Home/Garden
- Toys/Kids
- Consumer Electronics

Methodology:
Each of the sites was scanned to locate 79 features and functions within 9 merchandising tool sets. Results were aggregated as percentages to report feature penetration and then compared with findings from the e-tailing group’s and 2nd Quarter 2001 and 4th Quarter 2000 studies to track growth or declining presence. As usage dictates, new features are also added to each study. Specifics are noted in the study highlights as New.


THE E-TAILING GROUP’S TOP 10 GIFTING IDEAS SURE TO SATISFY HOLIDAY SHOPPERS:

1. MULTI CHANNEL CONVENIENCE–In-store returns, printable shopping lists

2. MARKETING INTEGRATION – "As Advertised" listings of in-store events

3. SUGGESTIVE SELLING- Up-sell and cross-sell to increase average order

4. OPTIMIZED SEARCH – Sort inventory based on recipient/occasion. Try this test: Enter Keyword: “Gifting” then measure the relevancy of the results.

5. CUSTOMER SEGMENTATION – Use features that appeal to all your shopper types

6. PREORDERS- Encourage early shopping for hot products

7. GIFT CENTERS – Aggregate gift ideas into one easy-to-shop gift area with tools

8. PRIORITIZED CUSTOMER SERVICE–Allow for real-time inventory & order status

9. GIFTING FOCUSED– offer wrapping, boxes, cards, address books, reminders

10. COMMUNICATION – Gather opt-in email addresses to build a database to then send emails with gift suggestions & enticements to drive holiday shopping


Highlights:
SEARCH –All sites scanned offer Search by Department/Category. 87% claim to offer Keyword Search however; there is room for improvement with the relevancy of these search results.

* To gauge relevancy we ranked all Search results 1-5 with 5 being the best. The average relevancy across all sites was 3.6.

* 57 of the 100 sites scanned sell via catalog as well as online. Reflecting the growing number of shoppers who browse offline then buy online, 89% of this group offered a Search/Shop by Catalog Number.

? Although only 26% of the sites offer Search by Occasion and 24% by Recipient, we strongly believe that incorporating this feature can provide a point of differentiation that will aid gift givers.

PROFILING – 92% of the sites provide some degree of a personalized My Account feature.

New: To better understand what is being offered to customers in this area we added to our metrics tracked 8 stated customer benefits for signing up.

* The most prevalent benefits included: 91% Email and/or Newsletter Updates, 80% Exclusive Sales/Offers, and 78% Order History/Status.

? Only 54% of the My Account areas promoted their stored address features as Address Books. The convenience that this provides will encourage customers to return to sites for their gift needs.

? Enable customers to share gift suggestions with others by offering tools like Refer/Email a friend (49%) and Wish lists (47%).

* Overall 88% of the sites use Targeted Email and 38% rely on Newsletters to communicate with their customers.

* New: We evaluated merchant opt in/out strategies in this scan and were surprised to find that Opt-Out (60% email/79% newsletters) is being used by more sites than Opt-In (52% email/42% newsletters). Note too that several sites employed both options in different site locations.

MERCHANDISING – Every site scanned uses Featured Product/Category to showcase products and 86% promote via Sales/Specials.

* Beyond these frontrunners the choice of merchandising tools varies greatly by category. For example, although overall only 40% of the sites use Top Sellers, 100% of the Books/Music and Consumer Electronics sites deploy this tactic. The message: Know your Category!

? New: Pre-orders/Monthly Programs are new metrics this quarter found on 29% of the sites. We see this as a good tool to entice customers to shop early this holiday season for hot items that may be in strong demand but have limited availability. It is used by 100% of the Pet and Office Supply sites, 86% of Mass Merchants and 80% of the Books/Music sites we surveyed.

? Similarly to offline merchants, 63% of the sites rely on Seasonal areas and 74% organize Themed areas to aggregate products – both are “must-dos” for showcasing holiday gift ideas.

? Cross-sell (62%) and Up-sell (46%) are ideal tools to increase the average order size of holiday purchases – but relevance is a must! Out of a possible 5 for most relevant the sites we scanned scored Cross-sell 4.3/Up-sell 4.1. Bravo!

CUSTOM CONTENT – In those Categories where information is critical to making a purchase decision the Internet continues to excel – and provide tools that are hard to match offline. These features are also proven to drive in-store traffic among shoppers who prefer to browse online/buy offline.

* Overall 24% of the sites provide Product Comparison tools but this interactive feature is on every Computer and Office Supply site in the study.

* While the overall presence of Glossaries totaled 35%, categories like Drugstores (75%) and Consumer Electronics (67%) consider them important consumer self-help tools.

* How to Guides found on 64% of the overall scan, are essential tools for 100% of the Drugstore, Office Supply, Pets and Sporting Goods sites followed closely by 93% of the Home/Garden, 86% of Mass Merchants and 83% of both Accessories and Consumer Electronics sites.

COMMUNITY – Although many pioneering e-commerce sites anticipated that community-like features would be key customer retention metrics, it has come to pass that the people and financial resources required to keep these tools viable often exceeds their value.

* Overall findings: Testimonials (18%), Bulletin Boards (15%), Clubs (11%) Chat (10%),

* Pets is the only category in our scan that indexes high for multiple community features: Bulletin Boards are found on 100% of these sites while 50% rely on Ask the Expert, Chat and Clubs to develop relationships with their customers.

* Also exemplary of Category specific nuances is the fact that Ask the Expert features found on 29% of sites overall, is present on 100% of the Computer sites scanned.

CROSS-CHANNEL – Integration of store, catalog, and Internet merchandising/marketing initiatives is now essential to meet consumer expectations of being able to call, click or come-in – which should prove particularly important this holiday season.

? Of those merchants with stores 100% wisely offer Store Locators while 95% of the Catalogers enable customers to Request a Catalog on their websites.

? New: To begin tracking the growing presence of store/web integration we added these key metrics to this scan. Of the 66 sites with stores: 65% permit In-store Returns, 12% allow In-store Pick-up and 33% include information about Store Events online.

? New: We see a growing trend toward building awareness of multi-channel marketing initiatives on websites. Of the 16% that promoted products As Advertised: 20% referenced Print Ads/ Weekly Circulars and 5% mentioned As Seen On TV Promotions.

? New: Leveraging an existing B2C web presence to create Corporate Programs (37%) is another trend that we believe merits watching. Aggregating applicable products for Corporate Holiday Gift ideas provides a good opportunity for bulk sales.

GIFTING – As shoppers become more confident in and savvy about shopping online, the convenience of shopping for gifts drives customers to those sites that offer best-of-breed gifting tools and services.

? Overall 69% of the sites scanned offer Gift Certificates/Cards, 67% supply Gift Suggestions and 65% feature Gift Centers.

? Of those who offer Gift Certificates/Cards: 83% mail printed certificates/cards and 43% send them electronically.

? While Gift Registries are only on 14% of our sample sites, 57% of the Department Stores offer this feature. Further mirroring their off-line models every merchant in this Category supplies paper Gift Certificates and 86% offer on-line Gifts Centers, Gift Suggestions and/or Gift Search.

? Gift Search, currently on 40% of the sites, is an under utilized tool that (when relevant) can help shoppers to quickly sort through a merchant’s inventory to find gifting solutions.


PRODUCT ENHANCEMENT - New: We’ve created this tool set to track the presence of features that are being added to sites as faster connections enable merchants to enhance online selling with the use of sound and motion. As would be expected early adapters are Category specific.

* New: 30% of the sites have “Flash” type of moving graphics but this feature is found on 75% of the Toys/Kids sites.

* New: The ability to Zoom (47%), Change Colors (13%) or view a product in Multiple Dimensions (5%) is used most consistently on sites selling Computers (60%, 40%, and 40% respectively).

* New: Among those sites using Zoom: Sporting Goods (100%), Department Stores (86%) and Mass Merchants (71%) indexed the highest.

* New: Apparel and Accessory sites find these features particularly helpful to enhance product presentations and highlight details. Zoom & “Flash” are both present on 67% of the Accessory sites. 57% of Apparel merchant use Zoom, 29% Color Changing and 21% “Flash”.

* New: Streaming Video (11%) and Audio (13%) is most prevalent among those e-merchants selling Books/Music (Video-40%, Audio-60%).


CUSTOMER SERVICE – 100% of the sites surveyed have Contact Information and E-mail Us in place plus 93% include FAQs. As history has taught, the importance of good customer communication cannot be underestimated. If a merchant can only improve one area on their site this holiday season, this is the place to start.

* Of note was that the number of sites offering 1st Time User Tips declined from 52% in 2Q01 to 34% in 4Q01. As new shoppers continue to migrate online it will still be important for merchants to provide this helpful feature.

* While Co-Branded Credit Cards (34%) were not that prevalent overall, they were offered by 100% of the Department Stores and Office Supply merchants.


4th QUARTER 2001 - ONLINE MERCHANDISING RESEARCH
Proprietary Study Conducted By the e-tailing group, inc.

For additional information contact:
Lauren Freedman,
lf@e-tailing.com,
phone: 312-255-9590
http://www.e-tailing.com


See Also:

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