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Nov 29, 2004
How To

Are Visitor-to-Buyer Conversion Metrics Outdated? How $600 Million+ JCPenney.com Measures Success

SUMMARY: Last year JCPenney.com racked up $600 million in sales, and execs expect to hit a billion in 24 months. How? VP Merchandise Richard Last tells us the key is *not* to rely too much on visitor-to-buyer conversion metrics. Discover what types of metrics his team uses, and how the data influences JCPenney.com's online marketing tactics in five ways that more traditional eretailers may ignore:
"Last year we were over $600 million in sales online; we'll be at a billion within two years," Richard Last, JCPenney.com VP Merchandise says confidently.

He plans to get there by focusing on a goal beyond standard conversions. "The metrics we [eretailers] are using today are standard conversion metrics based on traditional direct mail and catalogs. We are starting to think more and more that these really don't always apply."

In fact, Last notes sometimes focusing solely on increasing online conversions can actually be detrimental to your overall total multichannel strategy. "It reminds me of the early days when 'stickiness' was the big metric. Then, we learned sometimes 'time spent on site' might not always be a good thing."

For example, by reviewing metrics outside of immediate conversions, JCPenney.com has learned it's best to start promoting holiday shopping wish lists as early as September, despite the fact that the wishes won't convert for 90 days or more.

Why?

"Customers start to plan purchases and get ideas during the season. You could interpret those early shopping trips as being negative because she is not buying. You could really misread 'conversion'. But she is creating registries, sharing ideas with friends, planning shopping trips. It's a complex business, not as simple as conversions on a DM piece."

Last's main point: "We believe you can't think of the Internet just as a shopping channel as much as being a life management tool. In reality, instead of just thinking tactically about increasing conversions, it's really about providing solutions for the customer -- for her."

How does the JCPenney.com turn this "solutions" idea into practical reality? Last outlined six tactics:

Tactic #1. Expand your metrics

If you're going to think outside the shoppers-to-conversions box, you need a new way to measure success. "It's a challenge going forward," notes Last. For example, "What are the levers that truly point to multi-channel success? We should understand the impact of conversions online vs. shop online and buy in-store, especially when she is buying other products in addition when she gets there."

Last's team has begun to focus not only on immediate conversions, but more on how to measure "if we helped her with her buying decision" with the ultimate purchase to follow in any channel. Currently they use the following tools prior to the launch of any major site change:

o An in-house usability testing
o An outside usability lab
o A/B real-time testing on the site
o Monitoring trends in fashion and style relevance
o Talking with customers and with top selling associates in brick and mortar stores

Tactic #2. Make complex shopping decisions easier with solution centers

Last's team has launched a series of online solutions centers to help customers with the most complex buying decisions -- decisions they might normally need a highly experienced customer service person to talk them through individually.

Shoppers can get the personal help they need at their convenience, and then purchase online, via phone, or in-store. These online solutions centers include:

o An online bra fitting clinic developed with help from in-store bra experts

o A window solutions center (the range of JCPenney window coverings is enormously diverse)

Tactic #3. Make shopping more convenient for her with specialty boutiques

JCPenney is known for carrying a wider range of sizes than most competitors. For example, they have an unusually big collection of tall women's apparel. But, hunting for these items mingled in with regular sizes and with little availability in catalogs or stores can be challenging.

Last's team solves this problem online by presenting a series of easy-to-shop boutiques, including:

o Tall-size clothing
o Plus-size and petite boutiques
o Husky and plus-sized children's apparel
o Extra-wide shoe and boot department
o Maternity boutique

He notes that the maternity department is among the most popular on the site, and the extra-wide shoe boutique "has had a tremendous amount of success."

Again, the goal is to make the customer's shopping experience easier with online solutions... while allowing the actual purchase to take place via the channel of the customer's choice. For example, she can buy online and pick up in the store of her choice.

Tactic #4. Give the customer the features and benefits through text and photography she needs to make up her decision.

Last is excited about rising broadband penetration, but not because he plans necessarily to add video clips or other rich media to merchandise pages on the site. Instead he wants to add high quality photography so shoppers can almost "touch and feel" the item.

(This is critical for many shoppers who want to "feel" the fabric prior to making a decision.)

In the meantime his team focuses on presenting product information as clearly as possible. "Product description and price are by far the most important information when she visits a retail site. The third priority is then to complete the picture with zoom, alternate views, and enlarged views."

Instead of just showing the image the catalog or manufacturer provides, whenever possible the site team includes multiple views of a product. For example, you might see the soles of a pair of athletic shoes in addition to the top-shot.

Tactic #5. Enable easier ensemble shopping and cross-selling

"We like to think about this as expert advice. We present complete ensembles," says Last. "When she sees a photo of a top of a bed, she may want to buy the complete look. A lot of sites don't allow her to do that, and try to have her go in and out of product presentations for the comforter, shams, bedskirts, sheets or other selections. We enable her to buy all components from one page."

Plus, if there's a lamp that works with that bed, JCPenney.com will make it easy for her to buy that item too. "Ensemble selling is important."

Tactic #6. Build confidence and trust with consistent messaging

"To JCPenney, confidence and trust means clarity of the message across the channels for major company events and efforts. She should feel she's treated consistently whether she's in the store or shopping from home."

If a major new catalog drops, the site reflects it. If there's a major storewide sale, it's promoted in every channel from newspaper FSIs to the JCPenney.com home page.

"When she sees the major event message in a TV ad, and looks online before she goes to the store, the experience should reflect the message so she doesn't have to work hard to figure out which channel is relevant to her."

"Consistently simplifying her life and providing solutions is critical. It allows her to have a positive shopping experience and allows the retailer to be less dependent on deep discounting," Last notes.

"What we're talking about is not just increasing conversions but rather increasing profitable sales. The better we can satisfy the customer's needs, the better we do as retailers."

Note: JC Penney is a member of Shop.org, a forum for retailing online executives to share information, lessons learned, new perspectives, insights, and intelligence. More info at http://www.shop.org

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