The item to drop from your 2015 priority list

Now that the first quarter has drawn to a close, merchants are coming to terms with the reality of the priorities they’ve undertaken. With the all-important holiday season rolling out earlier and earlier each year, the window of opportunity is suddenly looking narrow to launch new features and functionality in order to meet year-end goals.

So it should come as a relief that one item can definitively drop off the list: same-day shipping. While media hype surrounding Amazon drones is flying fast (as it were) and new same-day delivery services are popping up right and left, for most merchants, the potential benefit of rushing to provide this service while it’s in its nascency industry-wide is far outweighed by the potential backlash if shipments are late, not to mention the potential drain to the bottom line.

For starts, research has repeatedly shown that consumers value free over fast when it comes to shipping. Fully 50% of shoppers have chosen a slower delivery timeframe in order to qualify for free shipping, a study by UPS and measurement firm comScore found; 57% say they’re willing to wait 7 days to receive items ordered online, and the same percentage report being willing to wait an additional 3 days if it means their orders ship free. Similarly, Business Insider found that fully 92% of shoppers are willing to wait four days to receive goods. And technology researcher Forrester found that shipping costs were second in importance only to essential product costs as a factor for consumers deciding where to shop online.

Secondly, the cost of successfully executing a same-day shipping program is significant — and with consumers largely unwilling to foot the bill, it’s not surprising that so far just a few merchants with significant economies of scale, such as Amazon and Walmart, are taking up the challenge.

That doesn’t mean same-day shipping won’t rise in importance in the future, or even next year. After all, while consumers value delivery cost over speed, they also cite the immediate availability of products in-store as a top reason they don’t buy online; even if they conduct research via phones or desktop computers beforehand, most consumers are close enough to stores that the convenience of popping into physical outlets for immediate post-purchase gratification trumps the efficiency of online ordering, which is why 75% of the forecasted growth in web-influenced sales through 2018 is projected to come from in-store purchases.  But that statistic also suggests an opportunity: if the costs of same-day delivery drop, merchants just might convince shoppers to skip the trip and finish the order they started online.

Additionally, same-day shipping is a higher priority in 2015 for merchants who meet multiple key criteria. Among them:

  • The brand has big plans for Asia. In the densely-populated urban capitals of China and India, same-day delivery is increasingly common, and further innovation is on the way, with Chinese ecommerce giant Alibaba already testing drone delivery in Beijing. Merchants with a footprint in these countries need to adapt to local custom and find a way to meet local expectations.
  • The audience is young and urban. The millennial city-dweller presents an ideal target for same-day delivery service for a number of reasons: urban areas afford merchants the potential to achieve economies of scale with their same-day shipping programs, and 39% of consumers aged 18 to 34 are interested in same day shipping —  a percentage 34% higher than for the general population. By offering same-day delivery, merchants can serve young professionals who already rely on takeout food delivery, and who may have discretionary income to spare.
  • Ship-from-store capabilities are in place at a number of locations. Same-day shipping requires that merchants tap every existing means at their disposal to meet the deadline, including a tightly-networked array of physical stores with sufficient inventory and staff to fulfill online orders, and quickly.
  • The brand specializes in high-margin products. Because same-day shipping is such a costly proposition, and because only for select product categories are shoppers willing to entertain paying more than $10 for the service, only merchants who can afford to subsidize costs to some extent should consider it.

bii-sameday-delivery-product-1

For most merchants, though, investing more heavily in existing fulfillment operations is a better bet for 2015. Merchants should consider investing in these alternatives:

  • Earlier and better messaging of shipping costs and delivery timeframes. While it’s long been a best practice to display total order costs in the cart and to message delivery options on product pages, many merchants still don’t do so. The problem is especially acute on mobile devices, where even in the cart merchants are unlikely to list all the available shipping options and their timeframes, according to MarketLive’s whitepaper on path-to-purchase optimization.
  • Ship from store and store-to-store delivery. As referenced above, merchants need to develop the technology and staff to transform retail outlets into local distribution hubs before they undertake same-day shipping. And meantime, such investments can help store associates locate “endless aisle” items out of stock at their locations, while online orders can be processed from nearby locations to speed delivery — even if it’s not within 24 hours.
  • Blanket free shipping for loyalty club members. Close to three quarters of U.S. consumers participate in a loyalty program, and of those participants, four out of five routinely redeem rewards. Active club members are willing to pay higher prices; while 79% of participants say they expect membership to save them money, fewer than 45% of active club members say price is more important to them than the brand name. Merchants should reward these behaviors by cutting the best possible shipping deal for club members — whether blanket free shipping, periodic free shipping, or just free shipping on their birthdays.
  • A friendlier returns policy. Fully two-thirds of shoppers peruse merchants’ return policies before purchase, according to comScore/UPS, so brands offering free or flat-rate return shipping or easy in-store returns have the potential to earn significant traction.

Are you contemplating options for same-day shipping? Why or why not?

Mobile payments: it’s time to wake up and smell the coffee when it comes to key integrations

On the surface, mobile payments would seem to be more of a much-hyped distraction for online merchants than a legitimate top priority. But while merchants may not need to jump on the bandwagon immediately, the innovations percolating in the mobile payment space deserve attention — and should cause some projects to move higher up the “must do” list.

Defined as portable technologies for enabling offline and online transactions digitally, without plastic cards, mobile payments are currently deployed by just a few well-known brands. The most visible and successful payment system belongs to Starbucks, which has offered a mobile app combining loyalty benefits and payments since 2011, allowing customers to pay for their morning caffeine fixes by scanning their phones at cash registers and earning points in the process. The company now claims that 16% of all in-store transactions are conducted using mobile devices and that mobile payments are growing 50% annually.

 

starbux

Of course, Starbucks isn’t the only merchant experimenting with mobile payments. In addition to the much-hyped debut of ApplePay late last year, mega-players Google and Amazon are both in the alternative-payments business, and Visa and Mastercard are both experimenting with payments that smooth transactions both on- and offline. Several major retailers, such as Walmart and Best Buy, are backing an independent effort called CurrentC. And there’s still Paypal, which remains the most widely-used alternate payment option for online transactions to date.

While to date just 3% of U.S. shoppers report accessing a mobile wallet in stores recently, sorting through the options is increasingly an imperative for merchants. As more and more merchants adopt mobile payment solutions and more and more consumers encounter and become familiar with the options, wider usage is only a matter of time. In fact, Forrester predicts that mobile payment adoption will grow exponentially, to 18 to 20% of consumers just three years from now.

To sort through the options, MarketLive founder Ken Burke offers this advice in “Merchants and the Race for Mobile Payments” in Retail Online Integration:

2015 will be a year of profound experimentation and flux in the mobile payments arena. Retailers should consider several factors before deciding which providers to partner with, including the percentage of their customers using mobile devices. Those with brick-and-mortar stores need to consider that an increasing number of their customers will be expecting to not only interact with their mobile devices in-store, but be able to purchase goods through them as well.”

Whether or not merchants undertake a mobile payment integration  in 2015, they can position themselves for smooth and swift adoption by optimizing their mobile experiences to the utmost. After all, the mobile payment solution doesn’t exist in a vacuum; merchants should prioritize key functionality that allows shoppers not only to check out quickly, but to take full advantage of brand offerings in the process.

As Burke writes in “Online Payments and their Effects on Mobile,” also in Retail Online Integration magazine,

“If consumers get used to buying music on iTunes or apps on Google Play with one click, they’ll expect the same experience in other mobile transactions. If their phones allow them with a single touch to buy a sandwich at Subway, how much patience will they have for m-commerce sites that take too long to load or don’t correctly adjust to the smaller mobile screen size? If they can buy a washing machine at Sears by scanning a barcode with their phone, how will they react in the frenzy of the holiday rush when an online retailer requires them to fill out multiple screens of personal, shipping and payment information on the fly?”

Beyond paying attention to essentials such as mobile site speed and checkout optimization, merchants should prime themselves for mobile payments by focusing on two key areas:

Loyalty programs. We’ve already noted the importance of a unified loyalty strategy for today’s maturing eCommerce marketplace. And with mobile payments on the horizon, the stakes are even higher: when consumers were asked what features they’d like to see in a mobile wallet, loyalty program integration was the top pick, with 57% of shoppers saying they’d want the ability to view their points balance and redeem rewards alongside mobile payments, Forrester found. Merchants can prime themselves for this future scenario by integrating rewards or loyalty programs with their online operations if they haven’t done so already — and prioritizing mobile functionality as the core of their offering.

Mobile coupon alerts and redemption.  The ability to access digital coupons and promotions was second on consumers’ wish lists for mobile wallet functionality, according to Forrester. Add the fact that 55% of shoppers reported they’d use their phones in stores to redeem coupons during the 2014 holiday season and mobile coupons become a compelling proposition. In addition to considering whether to implement SMS deal alerts, merchants should integrate in-store redemption options into existing email and social campaigns using scannable barcodes or QR codes shoppers can snap using their phones and take to stores.

How is the prospect of mobile payments affecting your priorities?

Research update: 2 resources for mobile commerce optimization

The transformative effect of mobile was the overarching theme at the recent MarketLive Summit. From keynote speeches that envisioned a frictionless commerce experience to breakout sessions on mobile performance and responsive design to panels on multi-channel integration with mobile as the connector, Summit content demonstrated that merchants recognize and are grappling with the new reality of mobile commerce.

But the Summit sessions also demonstrated that there remains significant room for improvement if merchants hope to fully capitalize on the opportunities created by this transition. Mobile conversions remain an abysmal 1%, less than half the rate of desktop sites, and fully 70 percent of the carts opened by mobile shoppers are ultimately abandoned.

Of course, easier-than-ever access makes it easier than ever for shoppers to bail before a sale. Even so, the disparity is remarkable between shoppers’ use of mobile devices to access brands and how often they use them to purchase the products they’re interested in. Despite two-thirds of online shopping taking place on smartphones and tablets, just 11 percent of online purchases are consummated on mobile devices.

And as merchants at Summit freely acknowledged, using mobile to bridge touchpoints and create a unified profile of the customer is so far more of a goal than a reality. With solutions for uniting disparate data streams still in their nascency and in-store hurdles to online adoption proving steep, merchants are finding the going slow, if ultimately worthwhile.

But while completely seamless transactions and universal data profiles may still be a ways off, there are steps merchants can take today to begin taking full advantage of the potential power of mobile. MarketLive’s latest whitepapers offer strategies and tips in two crucial areas:

Mobile KPIs and best practices: how merchants can track and improve mobile performance, from shopping and buying on mobile devices to enhancing the role of mobile as the crossroads of multi-touchpoint shopping. The mobile device as a shopping and buying environment in its own right – and how merchants can optimize mobile engagement, conversion, and revenue

Top Considerations for Responsive Design: how merchants can accurately gauge the impact on both costs and revenues of investment in a responsive design overhaul of their eCommerce sites.

Watch the blog for up to the minute mobile commerce news, and watch for more research reports on mobile topics in months to come.

Surmounting hurdles to online/offline integration – MarketLive Summit Report, II

When it comes to digitizing the retail store and connecting online and offline brand experiences, the devil is in the details. That was the message from speakers at the MarketLive Summit who shared detailed tactics and visionary goals alike around the theme of multi-channel strategy.

With 54% of all retail transactions set to be influenced by the web this year, addressing how physical store locations complement web interactions is a must for merchants. But while buzzwords are flying surrounding technologies such as i-beaconing, clienteling and mobile POS, the reality of integration is far less breezy. Breaking down silos between store and eCommerce operations requires an organization-wide shift with implications beyond simply outfitting retail locations with iPads.

Among the Summit insights speakers shared:

Store associates can make or break offline/online integration – treat them accordingly. Both Summit keynote speakers touched on the importance of store associates when it comes to providing the kind of individualized shopping experience shoppers who visit physical outlets ought to encounter. But as MarketLive founder and CEO Ken Burke highlighted in his keynote, consumers currently prefer by a wide margin consulting information on their phones when in-store — signalling an untapped opportunity. Burke demonstrated how MarketLive’s new point-of-sale tool will give associates a toolset for one to one interactions with customers that can not only drive sales, but build a lasting affinity with the brand.

O’Reilly Media founder and CEO Tim O’Reilly cited the Apple Store as an example of the potential value of store associates. After seeking help on the Web site, he was directed to make an in-store appointment via an online tool. At the store, he was assisted by an in-store “genius” who was able to transact for any equipment costs or fees he accrued. The process was smooth and seamless from the consumer’s perspective, and the brand demonstrated its expertise.

Ryan Gripp of MarketLive merchant H2O+, a beauty manufacturer and retailer, also cited Apple as an example of multi-touchpoint integration done right. “There isn’t even a ‘ship to store’ button, it’s just seamless,” Gripp said. His anecdote called to mind O’Reilly’s earlier mantra to “make customers do less” — for example, rather than presenting them with buttons for in-store pickup versus shipment, the Apple model backgrounds the unlikely options to create a smoother flow for the shopper.

Apple Store as example of successful multi-channel integration

Gripp shared his experiences on a keynote panel of MarketLive merchants whose topic for discussion was multi-channel integration. Also on the panel was Alyssa Young of sporting goods retailer Modell’s, who said it was imperative to back in-store/online initiatives with ongoing and extensive training, coupled with the right employee incentives for store associates and executives alike. “You don’t just put it out there once, you’ve really got to make sure you’re consistently communicating … this is for the customer overall and that’s a good thing,” Young said.

Unified data is a multi-channel initiative in its own right. A comprehensive customer profile that incorporates interactions and purchases across touchpoints is the key to delivering a relevant, individualized experience — so much so that two Summit merchant panelists said data integration was their top multi-channel priority. In addition, Burke’s keynote included a peek at upcoming MarketLive technology to help merchants better visualize customers’ activities across touchpoints.

Rick Turek of MarketLive merchant Sundance Catalog said his organization is working on implementing new data solutions and devising new revenue and order attribution models in the process — but he added that even without new technology, there are ways to ensure disparate data is shared across the business. Currently, he said, customer feedback from live chat, the call center, reviews and retail stores is compiled together and reviewed by representatives from each division. “Oftentimes we’re so busy being focused on our respective areas, it’s easy to forget the most important factor in the equation, and that’s the customer,” Turek said.

Pick your battles. Young emphasized the need to tune out the hype and base priorities on customer expectations. “Based on your customer base, based on your business, what do you think is most important?” she said. She also advised picking a simpler cross-channel implementation to start with, and fully absorbing all the lessons learned in the process, before moving on to larger projects.

It’s crucial to execute properly what projects merchants do undertake, the panelists agreed. Turek related how he used the “buy online, pick up in store” option with a large electronics retailer and was disappointed when the pickup process took the better part of an hour as store associates fulfilled his order and completed the transaction. “When you’re going to roll a program out, you’ve got to have it be a well-oiled solution .. doing it without a well-executed plan can really shoot you in the foot,” he said.

Not only do store associates need to be trained and incentivized to participate, but elements such as store signage, transactional email instructions to the customers, and point of sale procedures need to be synched.  “It is about the entire experience. It’s not just about saying yes, we have ship to store, it’s about the signage and everything,” said MarketLive strategist Scott Compton, who led the panel.

More blog topics based on Summit sessions are forthcoming. Meantime, how have multi-channel initiatives fared in your organization?

3 fundamental shifts merchants must make to meet customer expectations – MarketLive Summit Report

The MarketLive 2015 Summit opened Tuesday morning with a bracing challenge for attendees: stop thinking like eCommerce site owners. The morning’s keynote speakers, MarketLive founder and CEO Ken Burke and O’Reilly Media founder Tim O’Reilly, urged merchants to undertake fundamental shifts in perspective in order to continue serving shoppers with the relevant experiences that earn sales and loyalty.

Thanks to rapid technological innovation, consumers’ shopping behaviors and expectations are changing more quickly than merchants have so far been able to match, said Burke. The rapid rise of mobile has triggered demand for a new in-store experience that draws on the wealth of information available online, and in the process has laid bare inconsistencies and gaps between touchpoints. Mobile has also become the default access point for consumers to flit among a growing array of social networks; 52% of U.S. online adults use multiple social media sites, according to Pew Research.

social network data from Pew

O’Reilly described how technology is on the cusp of revolutionary change that will eliminate manual searching, browsing, and buying in favor of seamless interactions where consumption implies consent to purchase and transactions occur entirely behind the scenes. As an example of how existing modes of commerce are being upended, O’Reilly cited the driving service Uber, where riders provide payment information on signup and are automatically charged per ride, rather than having to dig in their wallets at the end of each trip. Other cutting-edge examples of frictionless commerce include Cover, which allows diners to skip waiting for the check at meal’s end, and Etup, whereby college students snap selfies to charge meals to their campus accounts.

Example of transactionless commerce - Etup

To position themselves for this new paradigm, merchants need to adopt new modes of thinking for 2015 and beyond, letting go of fundamental ecommerce tenets to make way for innovation. Among the necessary shifts:

It’s not (just) about the Web site. With two-thirds of consumers using a combination of mobile and desktop to interact with brands, and fully a third of 18-to-24-year-olds using mobile exclusively, merchants should adopt “mobile first” as their credo — not only in designing site experiences, but in how they themselves interact with brands and services online.

Moreover, by escaping the tethered web browser and exploring the unique blend of location data, social networking information and image tools mobile apps can draw on, merchants can move beyond segmentation and even personalization to deliver truly individualized commerce, said Burke. Rather than offering one-site-fits-all experiences, brands should take into account shoppers’ preferences and personal shopping histories, marrying disparate data points to deliver a wholly unique set of products and offers for each customer, Burke said.

Eliminate payments. As we’ve discussed previously, merchants should adopt alternative payments both to ease online transactions and to smooth potential offline-to-online purchases occurring in stores. But merchants should also begin mapping new modes of shopping that background transactions altogether. Automatic replenishment programs and subscription models such as the one used by O’Reilly Media (itself a MarketLive merchant) for digital books are only the beginning of the possibilities merchants should explore.

Subscription payment example from O'Reilly

They’re not customers; they’re community members. O’Reilly urged merchants to connect with consumers by identifying and serving their passions and demonstrating authentic expertise, saying that despite having a large social media following, his social contributions have at times been less effective than posts featuring lesser-known tech authors who nonetheless have an ardent following in the niches they cover.

Rather than focusing on individual social networks, brands should focus on telling the stories that resonate with their communities, and giving a platform to the voices that help tell that story. “By celebrating the people in your community, you actually create a social web,” said O’Reilly.

Sport Chalet, showcased during Summit as a MarketLive Merchant Award winner, has built a series of robust communities focused on individual sports and recreational activities, showcasing user-contributed social content, learning videos and expert profiles.

sportchalet

Watch the blog for more Summit recaps coming soon.

How to unlock video’s engagement potential

As online commerce matures and audiences grow more sophisticated, the challenge of engaging browsers and researchers so that they embark upon the path to purchase is becoming ever more acute. With the growing cacophony of social networks, close to 60% of shoppers reporting they delete email almost as quickly as it’s received, and merchants playing catch-up to consumer behavior on mobile devices, the ability to deliver a brand message that is truly arresting has become something of a holy grail.

Take the add-to-cart rate — the percentage of visits that result in items being placed in the shopping cart. Arguably, the cart plays a more important role than ever: as shoppers hop from touchpoint to touchpoint, the cart can serve as a repository for items they’ve researched and wished to access later, whether via a different device, in stores or on their computers once they get home. Data from the MarketLive Performance Index shows that the add-to-cart rate grew 1.5% year over year in Q4 2014, but still hovers below 10%, meaning that fewer than 1 in 10 shoppers are resonating with products enough even to want to save them — much less to buy them.

The main culprit behind the sluggish performance: smartphones, on which a mere 6%of shoppers added items to the cart.  And it’s not just the add-to-cart rate; pages per visit and time on site also lag on smartphones compared with the overall Index average, and the bounce rate, at 47%, is 30% higher than the overall average. These numbers are especially troubling given that smartphones are increasingly the key to mobile success, and given that mobile overall plays an increasingly crucial role in both online and offline sales.

To cut through the chatter and combat shopper ennui, merchants should take a close look at their video strategy. Since we last addressed the effectiveness of videos during the product consideration phase, more and more evidence has surfaced to demonstrate that video can be an effective engagement tool — including on mobile devices.

While the audience for brand videos is still relatively small, with around 10% of shoppers visiting pages with videos opting to view the content, that audience goes on to engage deeply and powerfully: not only do 70% of video viewers watch at least 80% of the video, but they’re 1.9 times as likely to make purchases after watching, according to video services firm and MarketLive Connect partner Invodo.

What’s more, fully a third of those video views occur on mobile devices, and mobile viewers are among the most engaged when it comes to promotional video content. Nielsen and AOL found that smartphone viewers were more likely to recall advertising content than desktop, tablet, or TV users, with 88% of smartphone users who watched ads without interruption remembering them. Even when distracted by their devices, 57% of smartphone users remembered ads, as opposed to just 23% of television viewers; when interrupted by a person, over a third of smartphone users remembered the ads, rivaling the recall of desktop computer users and trumping television by far.

In order to maximize the potential for videos to engage shoppers, merchants should:

Create and test different video content for different audiences. Rather than use a templated approach that shoehorns all their products into a single video format for shoppers across touchpoints, merchants should vary the length and content of video content — and track results religiously to tease out which combinations work best.

In general, shorter videos correlate with higher conversion rates, according to video services provider LiveClicker. (That doesn’t mean merchants should shy away from in-depth product demonstrations when they’re necessary, but they might want to experiment with multi-part tutorial rather than a single long segment.) When it comes to substance, video featured on smartphones should feature enough close-up content to render well on small screens; by contrast, finer details will be visible to desktop and laptop viewers.

Place video throughout the eCommerce site, not just on product pages. Merchants should give shoppers multiple pathways to access video content, including in content hubs where all videos are available to browse and on category pages. And like other forms of value-added content, relevant videos should be accessible via search results pages.

MarketLive merchant Brickhouse Security includes a link to its Video Center on the home page alongside blog and Q and A content, and a search for “nanny cams” brings up a featured video in addition to products.

Video promotion example from Brickhouse SecurityVideo promotion example from Brickhouse Security

 

Go native with social formats. In addition to experimenting with video content and length on their eCommerce sites, merchants should also use video content on social media — and not just by posting video links. Rather, merchants should take advantage of native social video formats, such as the micro-video Vine app for Twitter and Instagram’s mini-video feature. And with posts featuring video drawing heightened engagement from social followers,  there’s a benefit to porting over longer segments as well. Brands posting video on social platforms may even see a boost in visibility, as Facebook last fall altered its algorithm to favor video content using the Facebook player, as opposed to an external link to YouTube.

How do you plan to use video to maximize engagement in 2015?

 

Compete with Amazon, 2015: Growth leaves plenty of room for merchants to thrive

The online behemoth Amazon.com is on a winning streak. North American sales were up more than 22% year over year in the fourth quarter, and for 2014 as a whole North American revenues grew nearly 25%. Amazon already accounts for more than a quarter of all eCommerce sales in the U.S., according to Internet Retailer’s Top 500 report, and the recent numbers suggest Amazon will grab an even larger slice of the pie this year.

Furthermore, despite a recent price increase to $99, Amazon’s Prime program continues to attract shoppers, with roughly 45% of its customers paying the subscription fee to access free shipping with every order and exclusive streaming content. The high percentage of subscribers is significant because they spend an average of $1,500 annually with Amazon, 140% more than other Amazon customers.

But looking beyond these impressive numbers, there’s reason for small- to mid-sized merchants to take heart. For starts, Amazon’s direct sales of products were up 9.6% in Q4 — in the same league as the 9.1% reported by the MarketLive Performance Index — demonstrating that pure direct-to-consumer sales for even the biggest of the online mass merchants were in line with the market overall. Instead, the bulk of Amazon’s Q4 growth came from marketplace fees, Amazon’s Web Services cloud hosting service, and other smaller revenue contributors, which together saw year-over-year growth of 37%.

And Amazon still faces significant challenges when it comes to matching smaller brands’ ability to deliver personal service and niche product and lifestyle expertise. As we addressed in our series on competing with Amazon, the giant’s economies of scale give shoppers discounted products and shipping on a wide selection of items, the overall shopping experience can be like using “a massive vending machine”. Attempts to tailor the experience for specific niches — such as fashion, health and B2B purchasing — are still nascent, which means that for now, at least, there’s room for merchants with compelling brand stories to compete successfully.

Among the strategies to consider:

Leverage the visibility of Amazon’s marketplace, but strategically. Nowadays, it’s commonplace for brands competing with Amazon to simultaneously take advantage of its dominant position by participating in the Amazon Marketplace program. As we’ve discussed previously, in addition to gaining SEO advantage and reaching new customers, merchants can use the marketplace to piggyback on Amazon’s international forays and establish brand footholds abroad without the headaches of launching a standalone site.

To ensure the benefits are maximized for their own brands and not simply feeding that huge Amazon bottom line, merchants should curate marketplace product selections and track performance carefully. And they should explore other marketplace opportunities that offer visibility benefits, such as via Buy.com or Sears.com, and keep an eye on new upstarts like Jet.com, set to launch this spring, which is set to offer marketplace shopping to members.

Use mobile to spotlight service. With mobile serving as the primary connector between offline and online, eCommerce and social, merchants should do their utmost to ensure that mobile shoppers feel supported by customer service. By making proactive, individualized service a centerpiece of brand offerings on mobile devices — which are now the primary way shoppers connect with brands — merchants can distinguish themselves from Amazon, whose size demands a less service-obsessed approach.

MarketLive merchant Peruvian Connection puts customer service links front and center on its mobile site, with helpful information such as a sizing guide presented along with standard service links such as “contact us”. A toll-free customer service link anchored in the footer ensures mobile shoppers can always reach a live person from any page on the site.

Mobile customer service example from Peruvian Connection

Bridge in-store and online to create an immersive brand experience. Merchants with brick-and-mortar locations have a distinct advantage over Amazon: the ability to combine the depth of product information online with the concrete experience of touching and trying items in-store and accessing face to face assistance with shopping decisions. And thanks to the ubiquity of smartphones, the opportunity to create such an immersive experience has never been greater; technology researcher Forrester estimates that 68% of shoppers use their phones in stores.

Merchants should ensure that device-empowered shoppers in store can access the brand resources they need in a swift and seamless manner, and further differentiate their brands by giving store associates access to online information and training in guiding shoppers toward a purchase decision. Currently, shoppers have low expectations of retail floor staff: close to 60% of consumers believe they’re more knowledgeable than store staff about pricing and product availability, even as 54% say they would buy more from stores where associates were knowledgeable.

MarketLive merchant Sport Chalet opened a downtown Los Angeles outlet in 2013 featuring tablet stations throughout the store where shoppers can browse the brand’s entire product offering, consult reviews and in-depth product information, and seek live help from store experts.

Sport Chalet unified store example

How are you positioning your brand for success against the commerce giants?

Key messaging moments for winning engagement and sales

Email marketing continues to be the workhorse of eCommerce marketing campaigns. Less sexy than social media or paid search remarketing, but decidedly profitable, email remains a top tool in merchants’ marketing arsenals.

But while merchants who rely on “batch and blast” messages may still realize strong ROI on email for now, fundamental changes in the way shoppers interact with brands require new strategies for delivering effective and profitable messages.

Topping the list of changes, of course, is the impact of mobile. Fully 59% of retail email messages are now opened on either smartphones or tablets, according to technology reseacher Forrester — making adoption of a “mobile-first” email mindset essential.

mobilefirst

Given the primacy of mobile, any consideration of email strategy should also factor in SMS campaigns, which can be an effective sales tool — but not by merely replicating email messaging content. To craft an effective dual-messaging strategy for smartphone users, merchants must understand key differences between SMS and email touchpoints, and capitalize on their unique benefits.

The second major change for merchants to contend with is personalization. As more and more brands adopt personalization techniques, the evidence is mounting that — privacy concerns aside — consumers respond positively to tailored products, content and offers. More than two-thirds of shoppers want to receive personalized emails, the E-Tailing Group and MyBuys found. The payoff for merchants is potentially significant: technology researcher Gartner predicts that by 2018, brands that have invested in personalization will outperform by 30% those that have not.

In short, when it comes to messaging, shoppers’ context matters, and most likely, that context involves using a mobile device. Merchants who can transform email marketing into situational messaging — matching recipients’ needs, location and budget — are poised to stand out among the competition and reap substantial gains. To get started, merchants should:

Adopt a “less is more” attitude — especially via SMS. While consumers by and large are receptive toward email, with nearly one in four saying it’s a great way to learn about products and offers, there’s a limit to the goodwill — and the attention span. Fully half of shoppers say they rarely receive an attention-grabbing email, and fully 58% confess that they often delete marketing messages as soon as they’re received, according to the MarketLive Consumer Shopping Survey. More than a third say they open most of their emails on their phone, but don’t pay as much attention to them as when opening messages on a computer.

Data from the ML Consumer Shopping Survey about email

To fight against this ennui, merchants should focus on quality versus quantity and on relevance over frequency. By delivering only those messages that match the recipient’s interests, merchants demonstrate that every email they send is worth reading.

 

The need to downshift frequency is especially acute for SMS campaigns. Because text messaging is not only a one-to-one medium, but an immediate one — with 90% of text messages being read within 3 minutes, by some counts — merchants should exercise caution with the timing and frequency of their messages to avoid crossing the line from relevant to intrusive.

Build a trigger-based, personalized strategy. To trim frequency, merchants should build their messaging strategy around delivering the most relevant possible message in the right format following key events and at purchase decision points. Among the situations that merit tailored messaging:

  • On signup. The “welcome email” has been a best practice for years, but merchants should update it by extending their messaging into a series that offers new subscribers a taste of the myriad ways the brand can serve them, with links to social media and value-added content alongside discount and product offers. Merchants should modernize these messages by incorporating personalized product assortments of items previously browsed and others like them, and additionally should tailor design and content depending on whether shoppers are using mobile devices or computers.While SMS subscribers likely don’t want an extensive series of welcome messages, merchants should consider sending an invitation to join the brand community via the flagship web site or social media.
  • On store visit. Subscribers who consult the store locator or reserve items for in-store pickup should be alerted to in-store events and deals. Once at the store location, subscribers who download product content via QR code promotions or otherwise interact with the brand’s online offerings can be sent coupons for redemption during their visit.
  • On wish list activity — on-site or on social. Shoppers who establish a wish list can be reminded to share it with friends. They can also be alerted when wish list items go on sale or are almost out of stock.Merchants should also be aware of opportunities to message to social media users who’ve established wish list type collections. On Pinterest, for example, shoppers can receive alerts when pinned items go on sale — a service merchants can tap by optimizing their products for “rich pins”, especially for items featured in promoted pins.
  • On cart abandonment. Just a third of merchants in Internet Retailer’s Top 500 and Second 500 send emails following cart abandonment, Listrak found — a definite missed opportunity, as abandonment emails can spur purchasing at 19 times the rate of regular promotional emails, according to Experian. Personalization is the key to driving maximum ROI from cart recovery emails: messages that displayed the exact item(s) left in the cart were more than 200% effective than generic “you have items in your cart” reminders.abandonBecause so many shoppers now use the cart for research, and as a repository of saved items to consider later on their desktop computers or in stores, merchants should craft their messages as reminders and offer the full range of options for completing the sale, spotlighting information about in-store pickup or reservation options as well as a link to buy online.
  • On purchase. Merchants have long known they can take advantage of the series of transactional messages following an online order to further promote brand offerings. Now they have the opportunity to do the same for in-store shoppers, by offering to send an e-receipt via email or text message.  Merchants can build out the series of post-transactional messages with invitations to contribute reviews and, for replenishment items, reminders that it’s time to purchase again.

How has your messaging strategy changed for 2015?

Use social login to boost mobile engagement

We’ve discussed before the benefits of using social login to connect shoppers’ experiences on eCommerce sites with their social media profiles and to smooth the account creation process. Now there’s another compelling reason to bump social login up the priority list: It can be a powerful tool for enhancing the mobile shopping experience.

As outlined in our review of the latest Performance Index data and our 2015 trends outlook,  mobile commerce must remain at the forefront of merchant’s preoccupations — after all, it’s now shoppers’ primary point of contact with brands. Close to two-thirds of all minutes spent with retail brands now occur on mobile devices, according to measurement firm comScore – and for a third of millennials aged 18 to 24, mobile is the only online touchpoint used for shopping.

Given mobile’s swift ascent, and given the dismally low add-to-cart and conversion rates and high abandonment rates most brands are experiencing, merchants ought to be hungry for tools that can help boost mobile engagement and sales. Social login is well positioned to do so, because:

  • Acceptance and usage of social login is on the rise. More than half of Internet users have taken advantage of social login, and fully 88% are at least aware of the technology, according to a study by Blue research.
  • According to Merkle/RFG, the majority of social media usage now occurs on mobile devices. Shoppers are accustomed to using social tools on their phones and tablets and may be more willing to use a familiar login tool than to set up a discrete account on a merchant web site.
  • Finally, by using social login, merchants can piggyback on the innovations of leading companies such as Facebook and Google, improving their mobile experiences in the process.

As always, the devil is in the details; a poorly-executed social login implementation can cause more problems than it solves. To make the most of social login for mobile shoppers, merchants must:

Integrate completely. A quasi-integration with social media that still requires creation of a new password and even additional data entry in order to complete account registration will only frustrate shoppers. Instead, merchants should reward willingness to share social profiles with a minimalist signup process.

Additionally, merchants should connect social login with functions across the site, from wishlist creation to sharing products to saving cart contents for later reference — a crucial piece of functionality for mobile users who may want to revisit items in stores or on desktop computers.

MarketLive merchant Title Nine offers shoppers the ability to save cart contents, and enables social login that requires nothing beyond a username and password to activate.

Social login example from Title NineHeed privacy concerns. While merchants should take advantage of social login’s potential to unlock user profile information, they must also heed privacy concerns and proceed with caution. Shoppers are wary of surrendering too much information while exploring shopping’s digital frontier, with 88% saying “there are too many technologies tracking and analyzing our behavior”  and 86% saying “consumers have lost control of their privacy” — that’s 11% higher than the global average. Nearly three in four U.S. consumers say remarketing and personalized ads are “creepy”. And on mobile platforms, 42% of consumers say accessing their geographic location is an invasion of privacy.

To allay concerns about privacy, transparency should be the norm, and merchants should prioritize what data they need to track key metrics, versus “nice to have” information that might be interesting, but provide no actionable insights. Once they’ve convinced shoppers to engage as registered site users, merchants can request further information incrementally.

For further tips about social login, see MarketLive Founder and CEO Ken Burke’s recent article in Retail Online Integration titled “Why and How to Use Social Login to Win Customers.” And check out MarketLive’s recent whitepaper on analytics, “Connecting Data Points and KPIs in a Multi-Channel World,”  for further best practices on collecting mobile user information.

Are you using social login? Why or why not?

Performance Index: Why smartphone optimization is a top 2015 priority

Final results are in for the fourth quarter of 2014, and a clear priority has emerged for merchants: smartphone optimization.

Data from the MarketLive Performance Index shows that year over year mobile usage surged by close to 50%, with fully 44% of all traffic to merchant sites and 25% of all revenues derived from mobile visits.

2014q4_index_mobile

What’s perhaps surprising is the marked surge in smartphone contributions specifically. Not only did smartphones’ share of revenues surge close to 125%, but conversion rates on smartphones jumped as well, by 88%.

Tablet growth, meantime, was more moderate, with traffic actually dropping year over year, share of revenue increasing by just under 12%, and conversion by 21%. While these numbers are solid, they represent a marked slowdown from just a year ago, when tablet traffic and revenue both grew by more than 50%, overshadowing smartphone activity.

2014Q4_INDEX_mobiledeepdive

Now the situation is completely reversed — and the trend is set to continue. Indeed, MarketLive forecasts that smartphone contributions to the bottom line will overtake tablets in the second quarter of this year.

2014q4index_mobilerevshare

In the past, tablets’ relatively large form-factor compared with smartphones allowed merchants to skate by with near-replicas of the desktop experience — if not with sites that failed to optimize for mobile altogether. With tablet conversion rates edging close to those on the desktop browser, and with order sizes and overall revenue contribution higher than smartphones, predictions were rife (including on this blog) that tablets were the key to achieving mCommerce success.

Now, though, merchants can no longer be complacent and rely on tablet performance to shore up mobile sales. Instead, they must re-imagine their businesses to cater first and foremost to smartphone shoppers — and confront and master the challenges of delivering a user-friendly, secure and context-aware smartphone experience for both research and purchasing. In so doing, merchants will be positioning themselves well to take advantage of two key trends driving smartphone primacy:

The tablet plateau. Forecasts call for tablet penetration to plateau in coming years, with growth in the number of worldwide users set to dip below 20% this year and into single digits by 2018 as the market for tablets matures and stabilizes in the U.S. and other developed regions. With tablets perceived as an optional second device after the mobile phone, their penetration into emerging — and high-growth — markets is in doubt. By contrast, smartphones are poised for worldwide ubiquity, with some forecasts calling for fully 90% of the world’s population over the age of six to own one by 2020. Even within the U.S. smartphone ownership has the potential to growth significantly, with ownership hovering just below 70%.

The seamless store. As discussed in our 2015 trends  webinar, the surge in smartphone usage is leading more and more shoppers to consult mobile devices in physical store outlets. During the 2014 holiday season, more than 45% of shoppers said they planned to consult price and product information in-stores, as well as access promotional offers and coupons, according to the MarketLive Consumer Shopping Survey. That usage is paying off for brick-and-mortar retailers: Performance Index data shows that merchants with physical store outlets saw the percentage of revenue from smartphones jump from 5.02% to 13.18% — a whopping increase of more than 162%.

Our trends presentation outlined a few of the ways merchants can cater to smartphone shoppers — digitized store experiences, adoption of responsive design, and platform-agnostic loyalty rewards. We’ll explore each of these topics in greater depth in the month to come, as well as dive deeply into mobile KPIs and best practices and further emerging trends influencing smartphone usage.

Meantime, consult the official Performance Index press release and download the report with data tables for more in-depth analysis of Q4 performance.