According to a new study by Forrester Research, Inc., many online merchants convert just two percent of their visitors into buyers. This is true, despite the fact more than 75 percent of the e-commerce marketers surveyed in the study have gone to great lengths to make their Web sites more user-friendly. Yet, Forrester found that 66 percent of virtual shopping carts were abandoned in 1998 due to complicated instructions or “hefty shipping-and-handling gotchas.”
Focusing on New Customers
Part of the problem, Forrester says, is that as millions of mainstream consumers move to the Internet to buy everything from CD’s to porcelain vases, online retailers aren’t doing enough to lock them into becoming repeat customers. In fact, its survey found that 61 percent of the e-commerce merchants still focus much more on driving new visitors to their sites than creating loyalty and collecting data.
Furthermore, the report predicts that e-commerce marketers that have been selling online for more than 18 months will only thrive if they set up express checkout and personalized service such as the kind offered on — CDNow. At the same time, online merchants must grab their share of the 24 million new online shoppers who require more handholding and expect big savings when they buy via the Internet.
A Formula for Success
Finally the report suggests that e-commerce marketers should focus on four important areas — if they hope to increase the miserable two percent ratio of turning surfers into buyers:
Improved performance increases frequency of visits. Sites that perform 24-hours-a-day glitch-free will appeal to busy consumers.
Personalization will breed the kind of familiarity between customers and merchants that translates into repeat sales. Many consumers are ready to “spend” their personal data in return for time or money savings.
People will remain loyal to high-touch online stores. Smart merchants will offer better customer service via regular updates to FAQs, constant improvements to their sites and by using e-mail order notification. For example, Amazon.com sent a “we’re sorry” e-mail with a 10 percent rebate after a six-hour crash. The rebate contributed to their 66 percent return buyer rate.
Privacy guarantees must be given to customers. To gain access to the most valuable customer data — to keep them coming back — e-merchants must adhere to the policies of TRUSTe. Broken down to even more basic terms, the lesson from Forrester’s study could be summed up in one sentence: Treat your customers, as you would like to be treated.