Compete Blog: Back-to-School Shoppers Hit Web Early
By Lindsay Steinbach
Through
a special arrangement, presented here for discussion is an excerpt of a
current article from the Compete Blog. Compete Inc. is a web analytics
company that focuses on understanding how consumers use the internet.
Given the doomsday predictions about this year’s back-to-school spending,
I decided to take a look at the online behavior of back-to-school (BTS)
shoppers for the month of July, and see how their actions compared to
this time last year.
First of all, I tracked some popular back-to-school search terms. I
saw significant increases in the number of these searches this year,
and many websites saw a jump in traffic based on these searches. I focused
on five sites that cater to school shopping needs: Office Depot, Office
Max, Staples, Target, and Walmart.
Based on the search data, it’s clear that consumers are spending more
time this year researching their back-to-school needs on the web. But
I wanted to know more. How did this increase in search translate into
on-site activity? Were people buying more online, or simply finding out
information?
To answer this question, I looked at how many people performed three
key actions on these sites: finding a store, reading the weekly ad flyer,
and making a purchase.
From this information, I noticed that consumers engaged with these
sites at higher levels than they had in July 2008. However, these three
actions increased at vastly different rates. While back-to-school shoppers
did make more purchases online than they had at this time last year,
this jump was much lower than the others. It seems as though visitors
to these sites were more focused on gathering information, as seen by
the significant growth in store locater and weekly ad use.
Some retailers fared better than others in terms of engaging customers.
For example, Staples saw a 95 percent increase in weekly ad views, while
Office Depot only increased by 18 percent. However, Office Depot saw
the largest spike in engagement with the store locator, going from 2
percent of visits in 2008 to 7.1 percent of visits in 2009 – close to
a 250 percent increase. And the highly coveted purchase rate? Office
Depot’s purchase rate grew 47 percent whereas Staples experienced a 30
percent drop compared to last year.
So what can we take away from this data?
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First, this back-to-school season appears busier on the web than
it was at this time last year. Either shoppers are turning to the
internet in greater numbers, or people are starting earlier this
year in hopes of finding the best deals.
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Secondly, the increased frenzy around back-to-school shopping on
the internet does not necessarily imply a significant increase in
online purchases. Instead, people may be using these sites to find
coupons or to prepare for an in-store shopping trip. For instance,
Staples saw much higher rates of engagement compared to last year
(including a significant spike in weekly ad views), but its purchase
rate actually went down.
No matter what, it’s clear that the back-to-school rush has kicked
off and it’s only just beginning. Shopping will continue to heat up throughout
the month of August, right up until the first school bell rings.
Discussion
Questions: Are most retail websites serving their role as research
tools for consumers? For instance, are weekly circulars available
and easily accessible online to meet consumers’ needs? What other
information could retailers be providing on their websites?
The consumer shopping and information gathering experience must be seamless between the online and offline worlds. In fact, we should not be talking about them as different worlds. With 63% of homes in the US having broadband and many consumers having Internet access at work, successful retailers meld the two worlds. The easier the experience, the more attractive the store (either online or offline) will be to consumers.
The leading retailers are consciously delivering on the need that their online sites are in sync with the rest of their marketing messaging. They know that they have to take a holistic view if their marketing and operational efforts are to meet consumer needs and expectations.
Consumers are doing far more with their online research than just travel, mapping, financial, and automotive decisions. Fully 74% of consumers are now saying that they regularly/occasionally conduct online research for clothing and shoes. And, 79% of consumers point to the fact that they regularly/occasionally seek product information before, during and after purchase of store merchandise. (Source: BIGresearch, “Simultaneous Media Usage Survey” (SIMM); May 1 – June 18, 2009; 22,624 respondent completes).
The online, in-store experiences have to be connected. The winning retailers are getting better at it every day.
It is time to start thinking of retail websites as a store in a mall. The retailer must look at the behavior of the shopper in the same way. The only difference is that instead of walking the mall and stopping in and comparing merchandise and prices, the shopper does it on their computer.
Retailers who are not buying into this realization are not going to be the retailers of the future. There should be no surprise in the rise of internet retailing. The online experience is more efficient and more productive than the brick and mortar experience.
There is NOTHING retailers can do in their stores to turn this trend around. Those who try are wasting their money and time. They must shake the idea that the connection to the customer is at the store level and buy into the idea that the connection to the customer is online. Traditional ways must change. The reach of weekly circulars is going the same way as newspapers. The trend is to electronic communication. Bet on those retailers that provide their circulars (and the ability to purchase) online. Bet against those that think they have communicated only by delivering via newspaper and mailbox.
First, I believe the question should be rephrased. Retailers should not be research tools. Retailers sell product. There are any number of very focused and highly efficient online sites which serve as relatively good research points. Still, the sense behind the question is sound. What is it that online retailers need to do, which they do not, to meet the needs of the shopper….which clearly are NOT met based on site abandonment, conversion rates, and multiple sites visited prior to purchase?
The real job of the retailer is to empower their customer to make a better purchase decision. There is an aspect of “research” to this. But only an aspect. Empowerment begins with understanding the real consumer need, not just the specifics of a navigation pattern or item level interest. A consumer need is based on a real world challenge, issue or problem….to which they come to believe a specific product or type of product will provide the benefits required to resolve.
Retailers don’t, as a general rule, help consumers meet challenges nor do they address needs, and almost never are these efforts integrated into the shopping experience. Buying guides are usually hard to find, don’t provide insight to the specific items in the assortment, and rarely provide actionable links to buy without an entirely new navigation. Trend reports, for fashion retailers, are either in microsites or linked to 3rd party information, once again without specific mention or direction to the items in the assortment that will deliver on the benefit.
Consumers want retailers to demonstrate an emotional connection to “why” they are shopping. Then they want to be empowered to make a confident decision about the products which will deliver on that “why”. Very few online retailers provide this type of communication, nor do they create the clear and actionable linkage between “need” and “benefit”.
That being said, one of the few examples of real empowerment are the BTS lists some retailers store on their sites from various schools or organizations. These lists actually do meet a relevant need in the consumer, and provide immediate benefit delivery with clear product options for each item on the list. This is empowerment, but only at a very basic level.
If online retailers want to alter the “browse and leave” paradigm, they need to see their sites as having the capability of moving a consumer completely through the entire purchase cycle from awareness to completion of purchase. The past decade has been spent on the end of that cycle….navigating to the item page, ease of checkout, security, etc. The time is now to spend energy on the front end of the purchase cycle…where the real brand influence from a retailer perspective actually takes place.
It’s funny how our industry loves to pretend we are so much smarter than we really are. Do retailers need some online presence and services? Sure. Do word searches really give us any accurate information? Where’s the proof? There’s not enough history to prove any trend information and when Mom buys something on line that little Sally doesn’t like and cancels the order do we have accurate information on how that affects the analysis?
Making claims based on conjecture rather than the real world is our Achilles’s heel, so let’s not jump ahead of ourselves, shall we?
Search. It’s the word people both love and hate in the world of ecommerce. But it’s critical to the discussion of finding information online. Most site’s search sucks. Everyone has the experience of searching on Google, a company that has invested billions in information and findability. But most companies truly struggle to provide information to their customers and most site search is barely usable.
A perfect example–search for a woman’s sleeveless blouse on many well known clothing retailers sites and you find each color of the blouse as a separate instance in your search results, rather than as ONE blouse with many colors.
Getting search right is tricky, requiring both technology expertise and “findability” expertise. But if ecommerce sites are truly going to serve customers, allowing them to research, plan and prepare for in-store visits, search on most of them needs to be drastically improved.
It’s a well harped upon fact that retailers need to create a seamless experience online and in store. Pretailing has become a norm. Most shoppers research on the net, compare prices, and read reviews before buying the product. The key is to facilitate the decision making process and hold customer’s interest long enough that they do not feel the need to go elsewhere.
For ages, analysts have been talking about bringing the stores experience online, but now with popularity of net, it’s time to bring the online experience in the store, providing options to research product in the store, facilitating customers with information, ease of comparison and expert help while they are in the store.