Web Search & Marketing Newsletter: September 2011
Welcome to the new edition of our monthly newsletter, which covers some of the recent trends and developments in the field of web search and online marketing.
This month focuses on e-commerce websites, and in particular online retailers prior to the busy pre-Christmas period. Selling products online is one of the real strengths of the web, whether in providing a wide choice of products or at prices that are lower than traditional "bricks and mortar" stores. The web also has no geographical boundaries and many sites can now supply products across international markets at low or no delivery cost.
If you are running an e-commerce store, or any website that deals with online transactions, then this issue features a range of subjects that will be important to the success of your business. From the latest research on market and consumer trends, to the new Google Shopping service, and ways you can use Analytics to improve conversion rates and reduce shopping cart abandonment rates, this edition of the newsletter will hopefully give you food for thought, both now and for the future development of your business.
You can read more below, or you can also browse through previous editions of the newsletter, either by month or by subject. You can also follow our Facebook page for updates during each month, or we will also post news on our Twitter account.
On to this month's edition...
Recent research on the Australian online retail market
Two recent research reports have helped to provide an insight into the size of the online retail market in Australia and how shoppers are using the web. The latter study, in particular, indicates how the majority of shoppers use search as part of their buying process, which in turn can determine the online marketing strategies for many e-commerce sites.
Firstly, looking at the size of the online retail marketing in Australia, a recent report by analysts at the Commonwealth Bank indicated that AU$9.5bn was spent online last year. This represents just 3.8% of total retail spending, yet there is also significant annual growth in the market compared to traditional retail – online sales grew by 126% in volume year-on-year, or 90% in value.
Within this total figure, the research shows that people under 30 are far more active online buyers – probably not surprising, yet the future implications of this for the retail market could be significant. In addition to this, most people are seen to have purchased items just once online during the year, so if this figures only doubles then the impact on traditional retail will become even more significant.
In addition to this, the big increases in online spending are coming from the online-only retailers, rather than the traditional retailers with an online branch. These new online retailers tend to specialise in a product category - like Latest Buy, Skincare Direct, or Pet Essentials – and can target their customers online and offer products at lower prices than traditional retailers.
The online fashion retail sector is one of the fastest growing markets over the past year, and there is also a notable split between the type of products being bought offshore (outdoor products, cosmetics and beauty, books & fashion) and those being bought through local retailers (liquor, gifts and flowers). Of course the strong Aussie dollar has also had a big impact in online sales over the past year or so, to the concern of the traditional retailers.
The second piece of research is from the Australia Institute, that claims many online shoppers have no idea how search engines work, or that some of the results are paid advertising. Most shoppers also look no further than the first page of search results, with the conclusion that a small number of online retailers could dominate the mainstream market.
These results came from an online survey of over 1,000 people in July. It showed that 46% of online shoppers admitted that the order of search results always or sometimes influenced their buying decisions. That's probably obvious, but over a third were unaware that search engines included paid advertising in the results and only 15% went past the first page of search results when they recently conducted a search.
This last figure is not surprising and reflects other similar surveys, but online shoppers are more likely to visit a range of sites on the first page to compare products and prices. The concern is that some retailers, possibly with bigger budgets, will start to dominate the results, although all online retailers need to target their market effectively through SEO and PPC advertising, and then convert as many visitors as possible to sales (see below).
If you would like more details about these recent research reports and the implications for online retailing, please contact us now.
Google Shopping becomes an important online shopping tool
After many years of developing the product in the US and parts of Europe, Google finally launched their Shopping service in the Australian market in May. This is likely to become a leading player in the online shopping comparison market and is something that all online retailers should consider as part of their marketing strategy.
Google Shopping is a product and price comparison tool, and one of many sites that offer this service to online consumers. However, the advantage of this service for e-commerce sites is that it's completely free to list products and the prominence of the service is controlled by Google. Many product related searches now on Google will display a number of featured listings from the Shopping search results, so it's another way for online retailers to gain search visibility and attract traffic to their website.
Like all the shopping comparison sites, Google Shopping requires online retailers to create an account and submit a product feed to the service, although some retailers are also getting their products listed simply through Google automatically indexing their e-commerce pages. Once listed, items will be listed by relevance - which is based on similar SEO factors that determine the main search results on Google. However, shoppers can also re-sort the results by price as well.
There is no browsable directory structure to Google Shopping, so results will be determined by search query, although Google does display some links in the side panel, which lists related categories, or links to the retailers whose products are being displayed. At present, many of the results are being dominated by eBay listings, but as more retailers submit their product details directly to this service, there will be more variety and competition between the listed results.
As a free service, this is something all e-commerce sites need to consider. The product feed needs to be prepared and updated as necessary to keep the listed information and prices current, but as Google Shopping becomes more commonly found and used by online shoppers, it has to be important channel for retailers to use.
If you'd like more information on, or help with, the new Google Shopping service, please get in touch.
Using Google Analytics to track e-commerce activity
Many previous newsletter articles have extolled the benefits of using website analytics to track visitor activity and interaction on a website. Google Analytics, in particular, is a powerful free package and highly recommended for many small online retailers. One of the key features is the e-commerce tracking which can add an extra layer of data to the results and helps to track the Return on Investment of all marketing activity.
If you run an e-commerce site and are using Google Analytics, you need to activate the e-commerce reporting in the profile settings. You also need to make some adjustments to your analytics code on the checkout pages of your site, with some additional tagging that will record product and price activity for each order. If necessary, check with your web designer about how this can be implemented and, once done, check that the data being recorded matches the actual order details and values being received through the site.
Once this tracking is working correctly, you will see a new section of data appear in the Analytics reporting menu. This can give you information on sales revenue by day, average order values, conversion rates and data on the number of visits or days to purchase that a customer may take. In addition, you can get a breakdown of sales by product type and category which should reflect your own sales data, but can then be used within other standard or custom reports to get a better insight into marketing results, location of customers, repeat buyers and so on.
The new version of Google Analytics also now includes the opportunity to track multi-channel funnels. Whereas most analytics tracking will record a "goal' or sale from the current visit, this new report looks at interactions of visits from most digital media channels, including clicks from paid and organic searches, affiliates, social networks, and display ads. This enables you to understand how different channels work together to create sales and conversions, and how many visits may be taken as part of the buying process before the sale is made.
If you would like to know more about e-commerce tracking in Google Analytics and the new multi-channel function reports, please contact us now for details.
Tackling shopping cart abandonment
As the online retail market becomes more competitive, one of the most important elements for any e-commerce site is to convert as many visitors to sales as possible. Product and price will be important factors, along with the functionality and level of confidence provided by the site. However, once a visitor decides to buy, the shopping cart process can be vital and it's important to review and address the abandonment rates that might be occurring.
Using an analytics product, such as Google Analytics, will enable e-commerce websites to track visitor paths through the checkout process and identify where users may abandon the site. Seeing this data is one thing, but interpreting the reasons why people may leave the site before completing the purchase can be harder to understand, so testing changes to the shopping cart process may be necessary to try to improve the completion rates.
Typical abandonment rates in Australia are reported to be around 50% and this can be for many reasons. However, online retailers need to review the checkout process to ensure that it's simple for customers to follow and implement, without creating too many barriers or reasons for shoppers to leave the site. Typical reasons for shoppers to leave may be:
- Hidden delivery costs – not revealing the full purchase costs until a buyer is already in the checkout process can be a major frustration. Delivery options and costs should be clear and upfront.
- Forced registration – do customers have to register to buy or can they complete a simpler form to make a sale. Can they have the option and if registration is necessary, keep the required information to a minimum.
- Unsaved items – if shoppers are comparing products and final prices between a number of retailers, they may leave the site but then return later and expect to find their chosen items saved in the cart. If not, they may have to go through the whole process again and not bother.
- Too much information – try to keep the checkout stages simple (or clearly flagged in advance) so customers know what they have to do and what stage they are at. Information collected needs to be simple, with billing address ticked the same as delivery (if necessary) and checkout forms pre-filled if a user returns at a later date.
- Failed forms – if some fields are obligatory or need to be completed in a particular format, make it clear. Shoppers can get easily frustrated by forms not submitting correctly and having to go back to revise or re-enter information.
- No gift options – if your products are likely to be bought as gifts, are there options for gift wrapping or messages, and will the product be delivered in time?
In general, keeping the checkout process as clear, simple and as fast as possible is essential, but you may need to test this to get the best implementation. It can be best to go through the process yourself or get feedback from friends or actual customers. Maybe try the checkout process for competing retailers to see how these compare (although you might want to add to their abandonment rate!).
To find out more about tracking, testing and improving your shopping cart conversion rates, please contact us now.
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We hope you've found this month's newsletter useful. Please contact us if you need any more information on the items covered, or our advice on any aspect of your website's performance. Also, if there are any issues you would like to see in future editions of this newsletter, please submit your suggestions to us.