What are the toughest problems facing online retailers in
2003?
Problem # 1 Getting visitors
The number one complaint of online retailers is they are
not getting enough visitors.
Many choose to get visitors the same way their competitors
do. Online retailers try search engine placement,
pay-per-clicks, banner ads and other marketing tactics.
Banners can cost as little as $1 per 1000 views. Email
lists can be as inexpensive as $30 per 10,000 names.
Despite these low prices, retailers are finding that many
times these tactics don't deliver enough sales to justify
the cost.
Problem # 2 Low conversion rates
Turning visitors into customers is the second biggest
problem that online retailers face. This becomes a greater
problem when retailers sell items that people prefer to see
and touch before buying, such as clothing.
Do you know the answers to this question:
What percentage of your visitors become your customers?
That percentage is your sales conversion rate. This number
is one of the most overlooked and most impactful numbers in
online marketing. It's overlooked because website owners
often think that more visitors is the route to more
customers. What if their marketing is bringing lots of
visitors but their website is sending them away?
Websites can send visitors away in many ways, from
frustratingly slow download times to poor sales copy.
Visitors in general complain of having to download plug-ins
to view the website and confusing navigation.
Most ecommerce businesses are getting 1-2% sales conversion.
A small change in your conversion rate can have a big impact
on your bottom line.
Let's say you run your numbers and find that you have a 1%
conversion rate. Applying marketing know-how, you make some
changes to your website that makes customers more likely to
buy. Next week you test your sales conversion rate and
find that it's 2%. You've doubled your sales, without
spending more money marketing!
Once you get your sales conversion higher, your marketing
budget performs better. The same money that was bringing
you 1% sales conversion is now bringing 2% sales conversion.
While a small change in your sales conversion rate will
have a great impact on revenues, most website owners are
unaware of this and are losing sales.
Problem # 3 The proximity of the competition
According to Nielsen/Netratings, February 2003, the average
visitor spends only 55 seconds per webpage. In less than
a minute, your visitors decide whether to continue viewing
your pages or click away.
How many of your competitors are online? Find out now by
going to your favorite search engine and typing in keywords
prospective customers would use when looking for your
business. How many options do your potential customers
have?
Even if a visitor wants what you offer, he is tempted to
comparison shop. It's very easy to click and go to another
site. Are you doing everything you can to get customers to
buy from you?
Problem # 4 Price-shopping
If you sell something exclusive, price-shopping wouldn't
be a problem for you until competition shows up on the scene.
However, if you sell products that other websites offer,
then you'll find intense pressure to lower your prices.
Search engines give prospective customers a list of options.
Plus, there are price comparison websites like Pricegrabber,
MySimon and Dealtime that make it easy for consumers to
price-shop. They give their users prices from several
websites.
Problem # 5 Shopping cart abandonment
A visitor decides to buy from you. Somewhere between
placing items in the shopping cart and completing the
purchase they leave your website, usually for good.
More than 60 percent of online shoppers abandon purchases
before completing the credit card transaction, according
to Gartner Group, Inc. Which means if 40 people buy from
you, 100 started to buy from you. Imagine how many more
sales you'd have if you prevented some of these abandoned
carts.
Identifying the toughest problems facing online retailers
is the first step in dealing effectively with them.
About the Author
Raynay Valles, is an marketing specialist who helps
her clients sell dramatically more despite the problems
they face. Email her now at mailto:5toughest@jawdrop.com
or visit http://www.jawdrop.com for more information.