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3 Ways Online Testing Puts Retailers At the Top of the Global Ecommerce Battle

Multichannel, or better yet “omnichannel,” is an experience that most retailers hope to deliver. And why wouldn’t they when the route to making retail purchases is no longer paved in gold by brick-and-mortar stores? More and more consumers are turning to laptop/desktop computers, smartphones, tablets and social media sites to browse, research deals, look up coupons and offers and locate physical store locations, among other activities. According to eMarketer, US retail ecommerce sales in 2013 will total $259 billion – that’s a 14.8 percent annual increase over the $225.5 billion sales generated in 2012.

Recently, Ken Hao wrote an article in Fortune, where he mapped out the major players in the global battle for ecommerce domination. To put it in Hao’s words: “…the e-commerce market will become the most important battlefield of all…The next frontier of U.S. e-commerce growth is within the ‘last mile’ of local commerce, where 75% of all retail spending occurs fifteen miles from home, across both products and services. If successful, this ‘last mile’ market could double or triple the U.S. e-commerce market in a new surge of opportunity and growth.”

While many retailer websites are seeing thousands, if not more, visits each month, the reality is that high site traffic doesn’t always translate into high conversions – for some, conversion rates can be in the low single digits. Instead of causing widespread panic, this should instead be seen as a missed opportunity and one that can be remedied. The truth is that increasing web conversions is a “low hanging fruit” for many marketers. Take, for example, a hypothetical regional apparel retailer generating $400 million in total annual sales. Now assume 5 percent of those sales – $20 million – were generated solely from the brand’s website with a current conversion rate of 5 percent. Through simple A/B testing or more advanced multivariate testing campaigns, this retailer’s digital marketing team could very well increase its online conversion rate to 6 percent. Assuming that the average transaction value remains unchanged (or increases), that’s an incremental contribution of 1 percent to the company’s overall year-over-year comparative sales.

In a world that is moving rapidly towards promising an omnichannel customer experience, the brands that put the customer at the center of every decision they make and truly offer a seamless experience across all channels will come out on top. Here are three ways online testing can give retailers a competitive advantage in the global battle for ecommerce domination.

The Home Page isn’t always the first place to start

For most retailers, a significant portion of their website traffic comes from the Home Page. That’s why it is often the most common starting point when retailers are looking to get their feet wet with testing campaigns. But that just isn’t always the case and, if that rule is applied generally to every single testing campaign, retailers risk degrading the overall customer experience. Retailers who are generating strong click-through rates to the next layer of their site may be better off starting further into the website for their testing campaign.

For instance, an unusually high cart abandonment rate may tell digital marketers that a positive modification to the checkout experience will have the most direct impact on conversion. Similarly, retailers who are primarily interested in improving their average transaction value might be better off first testing different options for upselling on Category and Confirmation pages, and then later circling back to their Home Page to improve click-through rates. If the goal is getting users to click on a non-transactional call to action, such as viewing a video or setting up a bridal registry account, it may be useful for the digital marketing team to test the formatting and placement of that call to action across the entire site.

All retailers are not created equal

Just as no two consumers are identical, no two brands are identical. That’s why marketers must individualize their digital marketing strategies to align with their departmental and larger business goals. Imperative to the success of every retailer is an element of differentiation so trying to replicate what other retailers are doing won’t necessarily bring you closer to increasing customer engagement and revenue. Forrester Research analyst Kerry Bodine said it best at the Forrester Customer Experience Forum East: “Imitation is not innovation; it’s more of a parody.”

Video-based product demonstrations, listing or linking to customer reviews and promoting next-day delivery services have come to be seen as industry-wide best practices. It’s almost counterintuitive that a video demonstration of the various uses of a product may be detrimental to a customer’s decision to buy, or that a banner advertising next-day shipping may have a negative impact on sales over an extended period of time. But it’s important to remember that things are not always as they seem. The video demonstration may come across as overwhelming, not to mention the fact that a visitor may have a limited ability to view the video or a glitch/slow video load time may give an otherwise interested visitor the impression that they are missing out on important product information.

With next-day delivery, in some cases, marketers would be better off broadcasting this benefit upfront while others would be better off exceeding expectations at checkout, thereby reducing cart abandonment, improving the chances of a repeat purchase and even increasing the likelihood of that customer sharing their positive experience with friends across multiple channels. The optimal approach may even vary by customer segment.

A/B testing is just the tip of the iceberg in a retailer’s omnichannel experience strategy

While starting with A/B and multivariate testing is a smart and cost-effective tactic for many retailers, there’s a lot more digital work to be done if retailers want to effectively grab a chunk of that $259 billion ecommerce pie. What many digital marketers often assume is that the “winning” layout and content of a basic A/B or multivariate testing campaign is the best for each customer segment. Intuitively and empirically, we know that this is not the case.

Take, for example, the stay-at-home Dad who buys stylish yet comfortable clothes. Should he be shown different content than the millennial with more contemporary hipster style aesthetics? Thus begins the journey towards personalization – creating a meaningful and sustainable relationship with existing and new customers so they come back more often and spend (more dollars) with your brand across multiple channels – be it online, mobile, in-store, direct mail, etc. Sprinkle in the ability to group and rank customers by the profitability of their purchasing patterns and retailers have at their fingers powerful insights to customize and tweak their overall marketing tactics to be most effective, relevant and engaging.

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