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Tools That Keep Online Customers Coming Back

Tools That Keep Online Customers Coming Back

Adoption of online tools should facilitate interaction by customers -- e.g., interactive product imaging and site search. Tools that engage customers promote increased activity, and thus more data, which in turn generates insights obtained through analytics to create a better customer experience.

By John Lovett
02/12/07 2:09 PM PT

Web analytics and personalization of Web sites have surfaced as key development initiatives for online merchants, according to a new benchmark report from Aberdeen Group, "Clicks to Customers: The Real ROI in B2C eCommerce."

More than 44 percent of firms currently use Web analytics to evaluate customer behavior, researchers found. Fifty-nine percent of leading firms -- termed "best-in-class" by Aberdeen -- make this data actionable by strategically up-selling and cross-selling products using personalized collaborative filtering, also known as "affinity selling."

Companies personalizing home pages and delivering targeted content are the ones realizing the most value from their analytical evaluations, the report suggests.

Simple and Sufficient

Today's e-commerce solutions accommodate retailers on a number of different fronts. However, online shoppers are empowered with an abundance of competitive advantages, including product and pricing information. As a result, 59 percent of industry-leading retailers list keeping pace with competitors as a top driver for their online initiatives.

Businesses will differentiate themselves on the uniqueness of their products, competitive pricing and the quality of their service operations. This is indicated by the fact that 47 percent of top-performing retailers identified gaining or maintaining market leadership by delivering innovative tools and solutions as a key driver to their success, according to the Aberdeen report.

Ubiquitous tools such as site search and security/privacy encryption are the minimum prerequisites for a strong e-commerce experience, research shows, yet they do little for those trying to catch up to best-in-class online merchants in terms of sales lift.

As customers demand more from their e-commerce Web sites, their preference for consistency while shopping online must be satisfied. User interface features such as standardized navigation schemes, internal site search, and secure transactions are not just sufficient -- they're necessary.

It's also important to realize that consumers aren't necessarily buying from sites with elaborate bells and whistles; keeping it simple by providing standardized tools and technologies is often enough to attract customers to buy if content and products are relevant.

Technologies on the Horizon

Personalized customer loyalty incentives top the list for all retailers developing tools within the next 12 to 24 months. This majority feels the need to deliver targeted messaging to its customer base in order to improve sales and increase order size.

What's interesting here is that 53 percent of best-in-class merchants list Web 2.0 technologies on their road maps for development initiatives in the next 24 months. No doubt, these retailers are seeking methods to attract new audiences, gain their attention, and keep them coming back to the online stores for more.

Tool that provide alerts and lists of recently viewed products follow Web 2.0 technologies as secondary initiatives. They allow relevance marketing in the form of personalized alerts, and they support consumers' use of the Web as a research tool prior to making purchases.

Recently viewed product lists can be a time saver for online shoppers to pick up where they left off in their recent online shopping trips and to easily transact if they've decided that they're ready to buy.

Tying It All Together

Forty-two percent of all retailers strive to improve data integration processes by centralizing databases and sharing information throughout their enterprises, according to the study. This is increasingly becoming a necessity for multichannel retailers and many small to mid-sized businesses that utilize their e-commerce platforms as mini-ERP (enterprise resource planning) systems to manage their operations.

Most e-commerce platforms facilitate the integration of multiple applications such as online storefronts, POS (point of sale) systems, real-time inventory tracking and customer analytics into a single management platform.

This allows cost-conscious merchants to leverage the technology much like an ERP system to integrate disparate solutions and provide a centralized management interface.

Alternatively, large enterprises look for solutions that snap into their existing infrastructure and integrate all of their legacy solutions. Luckily for retailers, both licensed software and hosted on-demand solutions available from the vendor marketplace hinge on integration, flexibility and scalability.

Recommendations for Action

Leverage the use of analytics to determine online customer behavior, buying patterns and habits. When aggregated, these metrics can provide data on unique customers, as well as on entire customer segments. Savvy merchants will act on this data by providing relevant content to specific markets and capturing revenue through conversions.

Adoption of online tools should facilitate interaction by customers -- e.g., interactive product imaging and site search. Tools that engage customers promote increased activity, and thus more data, which in turn generates insights obtained through analytics to create a better customer experience.

Keep content relevant. Analytics and personalization are most effective when delivered to shoppers during key decision-making moments. Effective personalization and use of analytics as a dynamic function can lead to increased customer conversions, higher customer satisfaction and strengthened brand loyalty.

Click here to download a complimentary copy of the full benchmark report: "Clicks to Customers: The Real ROI in B2C eCommerce."


John Lovett is an e-commerce research analyst at Aberdeen Group. He focuses on e-commerce as it relates to the business environment, including the B2C (business to consumer) landscape. Areas of research include e-commerce platforms, search technologies, Web analytics, content and publishing management tools, and transaction engines necessary to conduct business online.


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