engaging online shoppers with custom, in-the-moment experiences

ENGAGING ONLINE SHOPPERS WITH CUSTOM, IN-THE-MOMENT EXPERIENCES

by Rick Weithas | Senior Solutions Marketing ManagerDIGITAL

MEASUREMENTWHITE PAPER

FEB 2013 © 2013 WEBTRENDS, INC. WWW.WEBTRENDS.COM.

CONVERSION OPTIMIZATION

Rick Weithas, Senior Solutions Marketing Manager

As Senior Solutions Marketing Manager, Rick drives the development of new

and emerging Webtrends product and software solutions. He is a key part of the

Solutions Marketing team that delivers customer value and leads critical Early

Adopter customer programs as well as the Customer Advisory Board for Webtrends.

ENGAGING ONLINE SHOPPERS WITH CUSTOM, IN-THE-MOMENT EXPERIENCESAs-it-happens digital intelligence helps retailers gain an edge with customers, bringing personalized offers and relevant products to their attention while on site.

EXECUTIVE SUMMARY

TREND

As online shopping soars—projected to be half of all sales in the U.S. by 2016—competition among retailers is at an all time high. Customers now have an infinite number of shopping choices at their fingertips. Mobile devices have also altered the retail landscape, with more and more people using their smartphones and tablets to search for products and make purchases.

PROBLEM

While shopping is now faster and more convenient, and has given consumers unlimited purchasing options, it has failed to capture the most important aspect of the shopping journey—the one-on-one personalized experience made invaluable by brick-and-mortar stores. Relevancy is just as important to the digital landscape, but the technology to support a moment-of-truth interaction with shoppers while they are on a retail site has been elusive.

SOLUTION

Newly developed, in-the-moment digital intelligence—the power to respond while a visitor is on your site and then impact the result before they leave—is giving retailers the ability to create a more personalized shopping experience for each customer. By combining rich historical data with as-it-happens insights, online retailers will gain greater conversions, revenue and customer loyalty.

AUTHOR BIO

WEBTRENDS STREAMS® WHITE PAPER. © 2013 Webtrends, Inc. 2

THE RAPIDLY GROWING PREFERENCE FOR ONLINE SHOPPINGYou didn’t need to be an expert in the retail industry to notice that 2012 was a year of unprecedented growth for e-commerce. If you happened to miss the headlines, take a look at the most recent statistics:

• Online retail is booming, with a year-over-year growth rate of 28%.

• By 2016, it is estimated that the Web will influence more than half of the dollars spent in U.S. retail.

• Mobile channels are influencing retailers, with mobile purchases reaching 5% of total online sales in the U.S.

• Cyber Monday online sales climbed to $1.46 billion, according to comScore. This is followed closely by Black Friday online sale totals, which surpassed $1 billion for the first time ever ($1.04 billion).1

• During the third quarter of 2012, $4,423 was transacted per second via PayPal.

• During the third quarter of 2012, U.S. retail e-commerce grew to $57 billion—an increase of 17.3% from the same period a year ago, according to the Census Bureau of the Department of Commerce.

Yet, with all the marketplace momentum for online shopping, there still are a lot of pitfalls facing e-commerce retailers. Competition is fierce, and the course can be especially tough for those going up against online retailing superpowers like Amazon and Walmart. Retailers must also find ways to engage with shoppers that support an enjoyable and personalized customer experience, replicating the relationships built by brick-and-mortar retailers.

ONLINE SHOPPERS BY THE NUMBERS

Online shoppers in the United States will spend $226 billion in 2012, up from $202 billion in 2011.* Average spending by 2016 is projected to be $1,738 per online shopper, up 44% from $1,207 in 2012.* Analysts estimate that e-commerce represents roughly 12% of retail sales overall, and that figure could double in the next 10 years.**

Sources: * Forrester Research Inc. ** Aaron Kessler, Raymond James Financial Advisors

+28%online retail year-to-year growth rate

ECOMMERCE REPRESENTS

12% OF RETAIL SALES


THE ERA OF THE OMNI-CHANNEL EXPERIENCEFor online retailers looking to break through in 2013, the mantra that many are trumpeting is customer experience. How users interact with brands—in various channels and on various devices—will need to be seamless, connected and near perfect in order to be a player in this now highly competitive landscape. Industry experts call this the omni-channel experience—that is, the ability to provide a uniform experience for shoppers, regardless of the channel.2

SO HOW DO YOU CREATE THE OMNI-CHANNEL EXPERIENCE?

According to Chris Raymond, a retail expert who writes for Success.com, consumers expect to be empowered with tools that make life easier.

“They want relevant offers, time-saving apps, and a seamless and effortless shopping experience,” said Raymond. “They want to browse late at night while nestled in bed, shop for groceries in the train station, and refill prescriptions in 20 seconds or less.”

THE TRANSITION FROM BRICK TO CLICK

As we become more digital and embrace “online everything,” communicating effectively with customers and understanding their needs isn’t as easy as it once was when retailers were almost exclusively brick-and-mortar. Back then, business owners engaged with their customers directly—understood their tastes, how they shopped and what they needed. However, these one-on-one relationships began to disappear as chain stores grew to dominate the retail landscape.

Yet that the one-on-one relationship with customers enabled store proprietors, sales people, customer service agents and businesses to understand shoppers’ needs through face-to-face communication. This interaction made it possible to provide personalized, immediate solutions. It remains a cornerstone of customer satisfaction and loyalty.

GLOBALIZATION VS. PERSONALIZATION

Online digital commerce changed the customer and company relationship. E-commerce enabled retailers to reach customers across the globe, expanding their reach and revenue potential while providing a greater breadth of choice and lower prices. However, the valuable one-on-one retail relationship suffered a setback in this mass-market growth period.

The omni-channel experience is the ability to provide a uniform experience for shoppers, regardless of the channel.


STRIKING A BALANCE WITH DIGITAL PERSONALIZATIONFortunately, the digital online retail marketer has never had better access to customer information and insight, enabling them to make more compelling offers. They are closer than ever to being able to deliver that one-to-one shopping experience that results in greater customer satisfaction and loyalty through responsive and relevant offers. There is really no excuse for a generic, mass-market approach any longer.

One example of a retailer that found a way to successfully strike the balance between global reach and personalization is Amazon–the 15th biggest retailer in America by revenue and by far the largest Internet retailer. According to Greg Girard, an analyst for IDC Retail Insights, Amazon’s greatest strength is that “its customer relationships are inherently one-to-one, more akin to what banks and telecommunication companies have with their customers.”

BEEFING UP INVESTMENTS

A number of other high profile retailers are also picking up on the personalization trend. Macy’s and Nordstrom are investing hundreds of millions of dollars over the next few years to beef up their e-commerce operations and integrate their in-store and online inventories—for quicker ship times and free in-store pick-up options. And these efforts are already paying dividends: In 2011, Macy’s online sales jumped 40 percent.3

The key to success is to ensure that once customers arrive on your online store, they don’t leave. The customer has already made the commitment to shop on your site and check out what you have, which is one of the most costly and difficult parts of digital marketing. However, more often than not, the reason they leave is due to the retailer not providing relevant offers and products.

Unfortunately, most companies waste this customer opportunity by delivering a generic message, offer or products that have no relevance. This generally results in the customer leaving your site and you lose that sale entirely. This drives up acquisition costs and stunts revenue growth.

However, recent advances in digital intelligence can help online retailers to create a relevant customer experience while the customer is shopping your site.

Remembering your recent shopping selections, making purchase suggestions and bundling items are just a few examples of the ways in which Amazon personalizes customers’ shopping experiences

DIGITAL SHOPPING APPSOnline shoppers now have easier methods for price shopping. Sites such as PriceGrabber and Bizrate make online comparison shopping a quick exercise.

There are also a number of apps, including Amazon’s Price Check, that does comparison shopping, and alerts you if a better deal on the same purchase can be found elsewhere online.


FROM MARKETING INSIGHT TO ACTION

In the Webtrends white paper, Staying Relevant Through In-the-Moment Digital Intelligence,4 key concepts illustrate how marketers can view customer behavior to enable more effective insight and action.

Marketers need to look at customer behavior from different perspectives and understand behavior both in the past as well as in the present to drive positive results in the future. Understanding the historical, recent and as-it-happens customer data helps the marketer to create relevant and truly compelling offers that drive conversion in the moment. In other words, don’t give customers a reason to leave the site.

THE FOUR R’S OF DATA RELEVANCE

Understanding the differences between historical, recent and as-it-happens customer data is critical in order for retailers to move forward from gathering insights to taking meaningful action on those insights.

The Four R’s become important to the online retailer as they adopt digital intelligence to drive results.

1. DATA RECENCY How current is the data from the time of the event and how important is it to know what is happening immediately?

2. DATA RETENTION How far back does the data set go and how critical is it to know what the history of the data provides?

3. DATA RICHNESS How much information about the visitor profile is available and how does this help the decision-making process?

4. DATA REALIZATION How will the data be used or consumed? Will it be used to develop reports, dashboard or drive marketing programs? Will it be consumed through APIs, or extracted for used in a data warehouse?

RECENCY

RETENTION

RICHNESS

REALIZATION


THE VIRTUAL RETAIL SALESPERSON COMES TO LIFEOnline retailers rely heavily on historical customer information and its deep and rich data set, built up over a long period of time, to power their marketing programs. Information about order history, location, buying preferences, demographics and geographical location are all contained in a database that can be leveraged to create a more tailored customer experience each time the customer enters the site. This data provides valuable insight that allows semi-customization of sites at an individual level.

For example, one online travel retailer had accumulated data on the purchasing habits of customers, and its analysis indicated that Apple device users had greater preference for more expensive hotel rooms. When serving hotel room offers, this retailer displayed the options it believed its Apple® device customers wanted to see first, saving them time and frustration.

This level of segmentation and targeting, even at a relatively basic level, can have a positive impact on customer experience. Never underestimate the power of saving someone’s time or improving the shopping experience by catering to a customer’s preferences.

REMEMBERING YOUR LAST VISIT TO THE “STORE”

Another good example of how improved targeting can help the shopping experience is to think about the last time you were shopping online. With historical data, your favorite online retailer knows that the last time you were on the site you placed a jacket in the shopping cart but didn’t buy it. On your next site visit, they can market that same coat plus similar coats.

Additionally, if they knew that you were a valuable customer (a frequent shopper), they could offer an incentive to get you to purchase, such as free shipping or a coupon. This improves the customer shopping experience by eliminating time-consuming steps in the purchasing process and creating customer loyalty.

Historical data is a major advantage of online shopping compared to traditional brick-and-mortar shopping. The online retailer has deep insight into the buyer and their behavior that allows them to market to them to more effectively. Only in rare situations now does a “big box” sales clerk have any historical background on a customer shopping in the store.

Segmentation and targeting, even at a basic level, can have a positive impact on customer experience.


POWER OF CUSTOMER OBSERVATION

One of the key advantages of a traditional retail store, however, is that a store clerk can observe the actions of a customer as they shop, and then intervene at the right time to answer key questions and help the customer find what they need to facilitate a sale. This is the key missing link of online retail.

Actionable information has been limited to historical information and doesn’t consider what the customer is doing right now. An online retailer has not had access to the same type of meaningful information during the time the customer is shopping on the digital store. They may be shopping for something entirely different than the last time they were onsite, such as shoes, but are still presented with images and offers of coats they looked at during the previous shopping experience. This leads to customer frustration, wasted time and a missed opportunity by the retailer to more quickly get the customer what they want.

ONLINE SHOPPING – REVOLUTIONIZED New and emerging as-it-happens technology is changing the customer experience game for online retailers. It helps them to not only market to customers based on historical information, but also based on customers’ actions while on the site. With as-it-happens capabilities, online retailers can create an experience that approaches that of a salesperson working with you to make sure your expectations are met—with the added benefit of a rich data history of that individual.

As-it-happens technology gives marketers the ability to develop systems that identify and segment customers as they come on the site, and then analyze their behavior while they shop. Action systems can be created ahead of time to serve offers and specific messages to customers, based on certain shopping behaviors or interest in specific items. Realizing the full value of this new technology, and having intelligent systems respond to every action individually may be in the future, but key expected actions can be predicted now.

Being able to intervene at the right time to help a customer as they shop has been the missing link in online retailing.

As-it-happens technology creates a customer experience much like that of a salesperson working to make sure shopping expectations are met.


For example, a high value customer that has placed the same product in the shopping cart more than once, and then leaves the shopping cart each time, could immediately be served a special coupon or offer to help close the sale. It could be based on the types of offers the customer has been most likely to use in the past. This makes the offer both relevant and in the moment, dramatically improving the likelihood of conversion. It simulates how a salesperson would work with a customer to find the right product at the right price at the right time.

ONLINE SHOPPING GOES SOCIAL

For retailers in particular, who are masters of the conversion funnel, the value of social media is a black box.

Brands are rightly frustrated with the difficulty of tying tangible value to their social media efforts. All marketing efforts should lead back to the bottom line, right? But tracing the long and looping path of the social landscape back to revenue can seem impossible. The path is complex because there are so many disparate data variables.

In marketing, relevance is king. And in the social world, data about prospects and customers is everywhere. By applying lessons from analytics data, you can slice and serve content to user segments that is more relevant and more successful than ever before.

INSTANT SHOPPING WITH FRIENDS

At one time, the key fashion pastime for young people was shopping at the mall with friends, trying on the latest styles and getting your friends’ best advice on fit, value and overall hip factor. Although this is still prevalent today, it is not what it once was.

An emerging trend is taking its place, becoming the new best friend in the shopping sense. Social sites such as Facebook and Pinterest are driving fashion. You shop on your own and post an outfit you like. Your friends can instantly see it and post feedback. The retailer’s website link is in the post as well, so all your friends can shop for the very same item.

One very hip fashion retailer indicated that almost half of their Facebook social traffic comes directly from Pinterest, attributed to social sharing of fashion. By blending historical information about the customers and their previous orders and trends with as-it-happens information on where they are coming from and what they are searching for gives retailers actionable insights. They can offer special pricing, treat these social followers with unique messaging to drive conversion, or create a fast follow-up social campaign, such as a tweet or blog.

TYING SOCIAL TO THE BOTTOM LINE59% of retailers say the returns on their social marketing strategies are unclear.

50% of retailers say the primary ROI from social marketing is listening and better understanding customers.

The State of Retailing Online 2011: Marketing,

Social and Mobile – Forrester Research


SHORT SHELF LIFE OF SOCIAL CAMPAIGNS

Social campaigns only last hours and in the fashion world it can be even shorter. It’s likely that a customer’s friends have all seen the latest Pinterest favorite within a matter of seconds—or minutes if they have to wait until class is over to check Facebook. That’s why as-it-happens information, coupled with historical customer data and insight, is vital to online retailers. It enables the shopping experience to travel at the speed of social.

There is high value in engaging with customers and being able to share news about new products and interests. Retailers are seeing the increasing importance of blogs and customer feedback to drive online purchasing. The ability to track traffic from these social sites and remarket based on interest and success of conversion is key to accelerating social campaigns.

DIALING IN ON THE IMPACT OF MOBILE

Consumers can interact with brands more immediately and intimately than ever before. Anywhere, anytime, through the touch of a button, customers’ relationships with brands are swayed by digital and mobile interactions. The experiences with brands on tablets and smartphones, as with other online retail, all drive toward one of two things: purchase or abandonment.

Imagine you are a typical shopper. You’re sprawled on a couch, TV in the background, perusing Facebook on your smartphone, and a commercial comes on for a new kind of board game. You love board games. On your smartphone, you initially go to the website of the company promoting the game, but after a little clicking around, you find a different retailer that’s offering free, two-day shipping for the game.

Even though you’re eager to buy right then, that retailer’s shopping cart button isn’t clicking correctly, so you quickly go to another site and complete the purchase there. The site you ultimately purchase from has everything to do with your experience.

If a company is losing selling opportunities because of less than satisfactory mobile experiences, it’s only going to get worse—and more costly.

If a company is losing selling opportunities because of less than satisfactory mobile experiences, it’s only going to get worse—and more costly.


MOBILE PURCHASERS SOARING

Consider this: On Cyber Monday 2012, mobile devices accounted for 18% of visits to retailer websites and 13% of sales. That was up 70% and 96%, respectively, compared with the same day in 2011.5

According to Forrester Research, more than 75 million mobile users accessed the mobile Internet in 2011, and that number will grow to nearly 117 million by 2015. More than 30% of smartphone owners are using their devices for product research at some time during the sales cycle, and 13% are using their smartphones to purchase. Consider how mobile is an enabler of social media, and the consumer touch points driven by mobile grow exponentially.

THE HOLY GRAIL OF RETAIL: CUSTOMIZING OFFERS IN-THE-MOMENTAs digital marketers, we always talk about the Holy Grail — in-session conversion optimization. That is, the ability to affect a customer’s actions while they’re still on your site.

Historically, marketers have only been able to respond to visitor behavior and events by optimizing and improving their next visit. While real-time analytics enables more timely insights, it is not always possible to impact the current visit. Additionally, it lacks the depth of information about the visitor that allows the marketer to take immediate meaningful action. This is important, because there is a risk that the visitor may leave the site and not come back, perhaps purchasing a particular item or reading a certain article on other sites.

IMPACTING THE IMMEDIATE ONLINE EXPERIENCE

What if it were possible to respond while the visitor was on your site and impact the result before they leave? It’s the same as a highly knowledgeable salesperson in a store who monitors what the customer is browsing for, viewing or reading, and then intervening to help that customer find exactly what they need—leading to a purchase during that visit. As-it-happens data intelligence enables this type of intervention to drive customer conversion. It is truly revolutionary compared to the after-the-fact reporting approaches of historical and real-time analytics.

As-it-happens digital intelligence has the power to engage the customer at the ‘moment of truth,’ the very instant when the shopper discovers a need that takes an online experience from expected to exceptional.


For both historical and real-time analytics, humans read data reports and dashboards. However, in order to take immediate action on in-the-moment analytics, the data has to be read by a marketing application. That’s because being able to react instantly requires pushing digital intelligence into content management systems, dynamic ad-serving engines, and the marketing ecosystem as a whole. Customers are moving quickly and if the system is not able to push digital intelligence into the ecosystem efficiently, valuable opportunities will be missed.

Chris Raymond, the digital retailing expert, says technology can break down the barriers between consumers and merchants, and restore some of that rarefied one-on-one attention. It has the power to engage the customer at “the moment of truth,” the very instant when that shopper discovers a need that takes a shopping experience from expected to exceptional. That’s exactly what in-the-moment digital intelligence can do for online customers and retailers.

THE WAYS IMMEDIATE ONLINE CUSTOMER INTERVENTIONS CAN BE VALUABLE

• An online retailer or online media outlet could enable content curators to change the featured products and articles on the fly, based on interest or preference. As-it-happens data would provide immediate insight into the impacts that those changes made. Pricing and position on new items can be changed with immediate feedback to test elasticity, a key value for launching new products and content.

• An online media company would be able to take advantage of historical behaviors combined with in-session visitor information about the content being viewed. This rich information could be served into an ad network or to their own advertising program to increase the likelihood of conversion, resulting in higher advertising revenue.

• A travel site would be able to leverage both historical and as-it-happens information to provide offers and recommendations to their visitors based on their past trip history and current search profile. Providing relevant travel offers that are consistent with past purchase history as visitors are searching or moving to the next page dramatically increases the likelihood of conversion.


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ABOUT WEBTRENDS INC.Inspiration drives us. Digital intelligence guides us. Innovation remains our goal as we help brands re-imagine digital marketing.

Webtrends dramatically improves digital marketing results for many of the world’s most admired and innovative companies. Our solutions have set a gold standard for innovation, performance and value since we helped establish the web analytics industry in 1993.

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© 2013 Webtrends, Inc.

THE POWER TO DRIVE ENGAGEMENT AND CONVERSION

Staying relevant with customers and delivering compelling offers and content at the right time to drive conversion is the ultimate goal of all marketers. The transition from brick to click to modern online retailing created endless possibilities for marketers to reach customers across the globe. This transition also empowered customers with easy access to price comparisons and product offers, driving up competition for a share of the virtual wallet. Successful companies will be those that engage with customers throughout the shopping experience, leveraging new, in-the-moment insights to drive engagement and ultimately conversion.

References

1. Black Friday Billion: Kick-Off to Brick-and-Mortar Shopping Season Surges Past $1 Billion in E-Commerce Spending for the First Time. comScore. November 25, 2012. http://bit.ly/10T0SGf

2. 13 E-Commerce Trends for 2013. Website Magazine. January 2, 2013. http://bit.ly/THInS1 http://www.websitemagazine.com/content/blogs/posts/archive/2013/01/02/13-e-commerce-trends-for-2013.aspx

3. Brick vs. Click. Success.com. http://www.success.com/articles/1912---brick-vs--click

4. From Insight to Action: Staying Relevant Through In-the-Moment Digital Intelligence. Webtrends, 2012. http://webtrends.com/files/whitepaper/Whitepaper-StreamingMarketingRelevance-Webtrends.pdf

5. Cyber Monday 2012: The Results. PFS Web. November 30, 2012. http://www.pfsweb.com/blog/cyber-monday-2012-the-results/

FEB 2013 WEBTRENDS STREAMS® WHITE PAPER. © 2013 Webtrends, Inc.

engaging online shoppers with custom, in-the-moment experiences

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