USING SHIPPING DISCOUNTS TO INCREASE CONVERSIONS

Why is it that small retailers are so afraid of eating shipping costs? Reducing shipping costs can dramatically increase conversions - meaning it costs you less to acquire each order. Shipping discounts may decrease your net margin per order - but you'll likely get significantly more orders.

I've seen cases where retailers gain a full point on conversion rates by offering free shipping! (Meaning out of every 100 shoppers, 1 more places an order)

Why is shipping cost such a big deal?
Shipping cost is becoming an increasingly important factor in shoppers decisions on where to spend their money. Here's why:

• You're competing with local stores for the order. More than half of internet shoppers indicated that they frequently use the internet to research products they want to buy - then purchase locally at a brick-and-mortar store. You have to compete with those local retailers for the shoppers business - and one area they consistently win is that there are no added costs to the order.

• As cost of oil goes up, so do shipping costs. Internet shoppers are becoming increasingly more weary of high shipping costs. A shopper looking to make a $50 purchase will likely be concerned from the beginning of their shopping experience that shipping costs will destroy any value proposition they find.

• Shoppers now have more tools available to easily compare the entire offer. The online ease of shopping a half dozen stores for the same product with just a few clicks has made it easy for shoppers to compare retailers based on the entire offer - product cost, shipping and taxes. You can easily lose business to a competitor whose price is higher - but eliminates shipping cost.

• As the economy flags, shoppers are more likely to pinch pennies, and shop more aggressively for the best deal.

• Shoppers have always loved a "great deal", and they always will. Free shipping offers provide additional incentive to complete an order.
  

What types of retailers will see the biggest gains by offering free (or discounted) shipping?

• Online retailers competing heavily with brick-and-mortar stores. These online retailers must always be offering a value proposition that beats their brick-and-mortar counterparts, without adding any additional negatives to the deal.

• Online retailers competing heavily on price point. If you get much of your business by offering a better price point than your competition, free shipping can play a big role in sealing the deal.

• Online retailers selling generally inexpensive items. Nobody wants to purchase a $10 item and then be jolted in checkout with an $8 shipping tab. Especially if the items are small and inexpensive to ship through the post office.
  

Should you set minimum order terms for free shipping?

Generally speaking, it is wise to set a minimum order amount for free shipping. This will provide the value, with an incentive to add that one-more-item to the order.

It's as important to understand the dynamics of your average order price points, as it is to weigh the impact to your bottom line when determining where to set the minimum order cutoff.

One of the best ways to get an idea where this magic number should be is to run a report on the size of your average ticket. Then get a count of orders under your average ticket, and a count of orders over your average ticket. If you get more orders under your average ticket, then set the shipping discount at right around your average ticket value. If you get more orders over your average ticket, set the minimum cutoff 10-15% over your average ticket value.

If the goal is both to increase conversions and increase average order size, then you'll generally want to set the minimum cutoff above your average ticket. But be careful not to set it too far above, or the positive impact on conversions will be very limited.


How much shipping cost should you discount?

How much shipping cost you should discount is different for every retailer.

If you have decent enough gross margins, and can afford to discount shipping entirely, it will probably provide you the strongest conversion benefit to do so.

Some simple math you can do to find out how much you can afford to discount:

• Get your most current month's traffic and sales report and figure out what your conversion rate was.

• Increase that conversion rate by .5% (projecting that will be your increase in conversions because of your free shipping offer).

• Based on the number of visitors you had in that month, multiply it by the increased conversion rate to figure out how many orders you might project with the shipping offer.

• Subtract your actual order count from that projected order count. Then multiply that number by the amount of your average ticket. This will give you a projected increase in revenue.

• Now run a report on how much the average shipping cost was in the previous month for orders that exceeded the minimum cutoff point for your proposed free shipping offer.

If the value proposition of offering free shipping - the increased conversions versus shipping cost absorbed isn't workable, you might then calculate how much shipping cost you'd be absorbing if you offered $5 flat rate shipping, or some other variation on the theme.

If most of the orders placed on your site select typical ground shipping (versus more expensive overnight or 2nd day air options), then you should also consider making the offer apply ONLY to ground shipping options, so you limit your cost exposure.

"PAIN-PER-CLICK" - PUTTING THE "PAY" INTO THE CLICK

Easy access to Pay-Per-Click (PPC) marketing has made PPC the most (mis) used online marketing tactic for small retailers. Tips and advice on how to put the pay back into the click.

Rule #1: PPC is Lazy Man's Marketing

PPC can be effective at driving some sales - and in some cases, significant sales. But, compared to other creative marketing (like good strategic partnerships), PPC is expensive. The returns on PPC campaigns for most e-retailers is much lower than that of good creative marketing.

Too many small retailers rely on PPC as a primary strategy, because it's just so damn easy and requires little thought or planning to get started.

Rule #2: Have a good PPC Strategy

There's nothing wrong with using PPC - we use it for most of our clients in some frequency. However, you'll get the best returns from it if you have a specific strategy.

In most cases, we find the best returns on pay-per-click when:

• We use it to research for organic search optimization, finding out which keywords/phrases have the highest conversions to sales, so we know what to spend our optimization efforts toward.

• We use it to buy very specific keywords/phrases that have high returns, but we're having a difficult time getting ranked organically for.

• Special holiday promotions where there isn't time for organic search rankings to "catch up" with the merchandising for that holiday promotion.

• We want to test market new products - we can quickly and effectively test conversion results using PPC without a major investment, or serious planning.

Rule #3: Semantics are everything - be specific!

General keywords are expensive to buy, an typically have very poor conversions to sale.

For example, if you sell chocolate, you might choose to pursue the keyword "chocolate".

As I'm writing this article, the cost to be in the top 5 positions for the word "chocolate" using Google's Adwords is around $1.40 PER CLICK! If you don't convert at least 5-10% of those clicks to orders, you're going to lose your ass on that one. And chances are you won't convert nearly as high as with a more specific phrase.

The problem is that "chocolate" is very general. Not only are more (amateur) marketers pursuing it and driving the bid price up, a searcher might use that keyword when their motivation is actually chocolate recipes, or information about how chocolate is made...or even the "LG Chocolate" cell phone! So maybe they get curious and click your link - but they're not serious about buying.

On the other hand, the keyphrase "artisan dark chocolate" is about $.50 per click, and indicates more clearly that the searcher is looking for chocolates presumably to buy.

Pick your keywords carefully. Both Yahoo! Search Marketing and Google's Adwords programs have keyword research tools that let you type in keywords and estimate clicks and costs you should anticipate. Use these tools.


Rule #4: You don't have to be #1 to be #1

A common beginner's mistake is to assume that they need to be the #1 ranked sponsored search ad. This is a misconception, and will lead to drastic over-spending.

If you have a good ad, and your merchandising is competitive, you'll do just fine being in the number 3, or even fifth ranked spot.


Rule #5: It's an advertisement. Write an attractive offer.

While sponsored search is very limiting in terms of ad copy, that doesn't mean you can't write an effective ad. Consider what the shopper has just searched for, and write your ad copy to appeal to the need they've just expressed.

Remember that your ad is going to be displayed next to your competitors ads, so indicate any special offers you have that are relevant - like "Free shipping over $50".

Be careful though to be up-front in your ad. If "thorlo socks" are $8 per pair...but only sold in packs of 6 - make sure you indicate that. You don't want shoppers clicking through (costing you money), only to discover that the terms of the sale are unacceptable to them.

Don't get lazy and write a single ad for significant variations on a keyphrase. For example, one ad is probably not sufficient for the keyphrases "mens golf shirts", "golf shirts", and "womens golf shirts" - each of those should have its own ad copy. The "Golf shirts" ad should probably specify that you have both mens and womens. The "mens golf shirts" variation might best mention popular mens brands in the ad, etc.


Rule #6: Track EVERYTHING

The major PPC venues (Google, Yahoo, MSN) offer conversion tracking. Implement it. Right away. If you haven't implemented conversion tracking and you're still here reading this...shew. You're dismissed. Go implement it now, then come back and read the rest of this!

To implement PPC with good returns, you need to be tracking the number of clicks, conversions and cost per conversion for each keyphrase variation you're bidding on. Period.


Rule #7: It's about conversions, not quantity

It doesn't matter how many clicks you get - only how much each order costs you. Know your maximum acceptable order acquisition cost, and stick to it.

If a keyphrase is performing close to your acceptable range, try adjusting the maximum bid for it down slightly. You might get less clicks, but you'll get the orders at a price your margins can support.

Don't hold onto a keyphrase just because it drives significant traffic. If that traffic isn't turning into the appropriate amount of revenue, optimize it or cut it off.


Rule #8: One Hundred Clicks to Judgment Day

It's easy to get spooked by a keyphrase when you watch it's click-cost tally start incrementing quickly, without any orders. You might just cut off a keyphrase prematurely that would have actually performed well in the long run.

It's a law of averages game, based on statistical data. Any keyphrase that's received less than 100 clicks hasn't given you a big enough statistical data base to work accurately from. Let it get 100 clicks down before you make any big decisions.


Rule #9: Split your buys into at least 2 campaigns

This one isn't so much a rule as it is a tip. I like to split my ad groups up into 2 campaigns (sometimes more).

The first campaign is "New Keywords" - it's all the new keyword/phrase ideas I've come up with that are un-tested. I set the maximum daily budget on that campaign down pretty low - I don't know how well they're going to perform yet, so I don't want them breaking the bank.

The second campaign is "High ROI Keywords" - it's where I move all of the keywords or ad groups that I've tracked for a while and know that they consistently deliver high returns. This campaign has no maximum daily budget, because I can be confident that whatever amount was spent has provided a strong return. I'm always happy to give away a buck if I know I'm getting two bucks back.

I watch my campaigns closely and shift keywords between campaigns as appropriate, based on the conversion tracking.

NO MARKETING PLAN IS A PLAN TO FAIL

"We're going to get ranked high on the search engines!" he said, gesticulating wild growth emphatically with his hands. "And we're going to do pay-per-click marketing too...did you know there are thousands of people per day searching for solar panels on the web? The streets are paved with gold out there!"

That was two years ago, when he insisted he didn't need to spend time on "formalities" like a marketing plan.

A few weeks ago, I ran into him during the course of business and I asked him how things went. He made a funny face and cleared his throat, and I knew where it was headed. Indeed the streets were paved with gold - for his competitors. It seems they had marketing plans.

As it turned out, there are thousands of retailers spending oodles of money to be ranked number one for "solar panels", and the pay-per-click bid rates for the same phrases were insane. If he'd researched a real marketing plan, he would have known that going in.

Marketing plans aren't for presentations - they're for YOU

Whenever I talk to small retailers that see marketing plans as a formality, a waste of precious time and resources, it always seems they've misconstrued the point of a marketing plan. A good marketing plan isn't about fancy Powerpoint slide shows to wow execs in a boardroom, or lure investors.

A good marketing plan is a no-B.S., well researched plan of attack, and the process of creating it forces the entrepreneur to perform the due diligence to truly understand his market dynamics, and figure out how to reach his target audiences in a cost effective way.

A good marketing plan is for the entrepreneur - it's your road map. Without it, you're shooting in the dark, and your marketing dollars are always spent with the stress of "what if this doesn't pay off".

What's included (minimum) in a good online retail marketing plan

• Market Dynamics Analysis - how much money are consumers in the U.S. (or wherever you're marketing) spending on the type of goods you sell? Are average price points going up, or down? What trends in the marketplace support or jeopardize your position?
  

• Competitive Analysis - Who are the competitors in the market? What advantages and disadvantages does each have? Who are the leaders, and why?
  

• Unique Selling Position Refinement - how and why will you be able to compete with the leaders in the market? What customer needs are going unfulfilled by the existing competition? Why will shoppers come buy from you online instead of purchasing in a local brick-and-mortar store? Why will they buy from you instead of your competitors online?
  

• Risks & Advantages - What changes in the marketplace could challenge your unique selling position, or viability? What advantages do you have over your competition?
  

• Ideal Target Customer Profiles - Who specifically would be the easiest customer to sell your product to? If you think "everyone" is an ideal customer for your product, you're probably doomed if you don't narrow down your profile. Even if "everyone" could use your product - trust me, you haven't got the money to market to everyone. Who should you be targeting first? What publications do they read? What websites do they frequent? What other products do they buy? What services to they purchase? How much money do they make?
  

• Potential Marketing Venues - Using your ideal target audiences (previous step), you can now use their lists of interests and other buying relationships they have to figure out how to reach them. Often potential marketing venues will include:
  • The obvious - search engines (including Pay-Per-Click)
  • Comparison Shopping Sites (like Yahoo! Shopping)
  • 3rd Party Affiliate Networks (like Commission Junction)
  • Niche Blogs
  • Online publications
  • Print magazines
  • Social Shopping sites
    

• The Role of PR/Press - if you have a creative concept, and a real value add in your unique selling position, you may be able to leverage the press into highly valuable advertising that would otherwise be impossible to afford. What publications would be likely to write about you? How will you get their attention? How big will the role of the press be in your sales?
  

• Possible Strategic Partnerships - what companies might you partner with, that reach the same target customer audiences you do? What types of cross-promotion deals might be viable for them? How will you reach them? What will your elevator pitch be?
  

• Cross-channel Opportunities - if you have a brick-and-mortar retail store, or mail-order catalog distribution, what cross-promotion can you do with your website that will help increase sales for all channels?
  

• Customer Re-Monetization Strategy - new customers are expensive to get. What role will customer loyalty play in your revenue projections? What loyalty strategies will you implement to effectively re-monetize your customer base? What percentage do you expect will place multiple orders? How many orders per year can you expect from your average customer?
  

• Cost and ROI Projections - chart it out! How much money will you be budgeting for each marketing campaign, over the course of the first year? What returns do you expect on each, over the course of the year.

Using your marketing plan effectively

There's no value in your plan if you don't use it, and chart the results. Start by defining a list of deliverables for the first quarter, with specific deadlines on each. Then start work.

You should be careful to track the results of each marketing campaign independently so that you can easily see which ones are working, and which are not.

Pay careful attention to results, and optimize/change campaigns accordingly.

Update your marketing plan quarterly, based on what you've learned that quarter.

Need help?

Suite Spot Commerce researches & authors marketing plans for our clients, as well as implements their marketing with guaranteed ROI results. You can contact us to get a quote and discuss in detail.

GOOD CHEESE DOESN'T STAND ALONE

I just got my latest copy of Internet Retailer - the industry rag for all of us hardcore e-commerce geeks. This month's issue features an article about whether you should build or buy your online retail platform.

While there are arguments on both sides of this one, small retailers definitely agree that the cost of building a robust platform is prohibitive, not to mention that it takes so much focus and energy it can leave you short changing other aspects of your venture (like sound merchandising and marketing).

But that's another topic by itself, which I'll discuss in another rant later on.

What everyone who's been in the online retail business agrees on is that a good cheese doesn't stand alone. It will be critical to your success in the long run that your selected platform (built or bought) can play well with others.

Making do can kill you

I was working with one of our recent new clients, who's switching from another program to Suite Spot Commerce's platform. They had started with their existing cart program (we'll change the name to keep our competitor anonymous - a good nickname would be "Satan Cart") because their old web designer had recommended it.

But "Satan Cart" didn't integrate with Quick Books, so they had two full time data entry employees whose job it was to manually re-key orders from their cart program into Quick Books.

He figured it was costing him around $5,000 PER MONTH to re-key orders - and losing money during that time. All because their cart software refused to play well with others.

By the time most small retailers discover their precise data integration needs, it's too late.

The cost of band-aids

Small retailers are often budget bound and overwhelmed by the prospect of picking an e-commerce platform from the hundreds advertised all over the internet. To make matters worse, often small retailers don't pick their platform - they end up using whatever their web designer recommends.

It's easy to think "we'll just start with this, and as we have additional needs...we'll have programmers adapt what we have..." But that thought often leads to a costly mistake.

Often times the cost of having custom band-aids developed to meet your additional integration needs is beyond reason.

What you must understand is that most shopping cart software is "closed source" - meaning that it's comprised of proprietary "compiled" modules that cannot be edited by anyone except the original programmer.

So when you need changes to your "inexpensive" shopping cart program - enhanced functionality, or new features - you must either hire the original developer (at a premium price), or pay another programmer to investigate the database constructs and "reverse engineer" the program enough to add in the required features - also at a premium price.

It costs a whole lot less to spend a little more up front for a system that has features you don't need today, but think you might one day need, and that integrates well with other programs.

Do-overs are expensive

Another common flaw of logic is to think that when you need more functionality you'll just "switch systems". Often times do-overs are cost prohibitive, because they typically require all website code to be re-written to fit the new system - not to mention the cost of copying the data from your old system into the new - which can be very expensive as well.

Assessing for the unknown

If you don't know what your needs are going to be down the road (you should assume that you do not), you can still pick a platform that is likely to integrate well, and inexpensively into other software you may need in the future.

A few basics:

• Check to be sure your selected platform has the ability to easily export customers and orders (separately) to a standard flat file or XML format. Many accounting and inventory management programs will support importing from these formats, reducing the possibility of needing custom integration in the future. Also, this way if custom integration has to be done, your programmer isn't starting from square one.

• Check to be sure your selected platform allows for the importing of customers and orders - you may at some point want to list your products with a 3rd party shopping venue (like Shop.com, or Amazon.com), in which case you'll need to be able to import orders.

• Ideally your platform should allow you to accept orders from 3rd party sources using an XML post over the web.

• Check to see if your selected platform is already certified with other 3rd party accounting or inventory management software, like Quick Books - if they integrate with several, you have options, and you can feel more comfortable that it will be possible to integrate with others that may not be supported currently.

• Find out what format the database is stored in. You'll want a platform that uses a standard database program (Microsoft SQL Server, MSDE, Oracle, MySQL, etc.), versus using their own proprietary database format. This way if you need to have a programmer import, export, or create custom reports for your database, it will be possible.

• Make sure the terms of any agreement allow you to obtain a complete copy of your database, should you need it. Some platforms (like Yahoo! Merchant Solutions) will NOT give you access to your complete database - thus increasing the cost of switching to another platform should you ever need to
  

SOCIAL SHOPPING - BOOM OR BUST?

It's all the rage these days. Every time I read the latest business news it seems like someone's hyping social shopping. But will it be as big as its buzz?

If you're new to social shopping, there's a great introduction in this article from the NY Times. Essentially it's the marriage of online social networking like My Space, and independent product recommendations. Perhaps the most popular example is ThisNext.com - a site that doesn't actually sell anything but simply acts as a social shopping funnel to retailers.

The general concept is that shoppers are much more likely to purchase a product that comes recommended to them by someone they network with. Some of these sites even allow shoppers to shop together virtually online - selecting products into a group collection and making notes about them to others in the group.

The concept of improved conversions through independent recommendations certainly isn't new - many large online retailers have been collecting and publishing customer reviews for years in an attempt to boost conversions.

While the Silicon Valley whipper-snappers are already declaring victory as the next great shopping innovation - I'm not quite sold.

It's not that I don't see the value...

I get the value of social shopping - I've used a similar concept to market high-end fashion apparel, by forming relationships with some popular fashion bloggers who wrote daily about the products and incited small flurries of buzz.

I see strong value in social shopping. I believe it's a fantastic innovation that will fuel some types and segments of the online retail industry. But I see the scope as limited, and I doubt we'll see social shopping "replace" other valuable traffic sources - rather the potential to be an additional source of revenue for some online retailers.

Ultimately, I believe the biggest benefits of social shopping will be realized by niche product manufacturers and niche brands, and retailers specifically seeking a younger audience. A small company with a truly unique, innovative product but limited brand marketing resources will have the possibility of suddenly catching on in a viral manner through social shopping networks. All it takes is one person to hear about the product and communicate it to their shopping network to start the fire.

It's just that...

• The value seems largely limited to introducing shoppers to new types of products they weren't previously aware existed. Social shopping doesn't seem to have any particular value add for mainstream consumer products over typical recommendations. If you already know exactly what you want, social shopping is a mute point. However, even if you're actually shopping for a mainstream product - say a kitchen appliance - social shopping doesn't seem to add anything of value. All of the major appliance (<- or insert other mainstream product here) retailers already have shopper product reviews.
  

• Beyond introducing shoppers to new products, the ability to sway shoppers toward specific products is probably very limited to shoppers purchasing from a need to be liked. The rest of us really don't care that much about what other people think. I (and many consumers like me) don't put a whole lot of weight on product recommendations anyway. We realize they can be manipulated, and often are like movie reviews - only of any value if the reviewer has the same needs and perspectives that we do.
  

• Because younger shoppers tend to be influenced more by what other people think, and are the early adopters of social networking, the effective scope of social shopping is likely to be younger shoppers - with less spending power.
  

My disclaimer...

Social shopping is new, and certainly in its infancy. My comments are as of the date of publication. I could be wrong in the long run - this is my take today. No warranties expressed or implied.

WHY WHAT WORKS FOR AMAZON, WON'T WORK FOR YOU

How and why a small retailer has the advantage in effective cross-sell recommendations.

Recently a client approached me, asking if we could implement the same product recommendations strategy that Amazon.com uses, for his retail site.

If you've shopped Amazon.com lately, then you've probably noticed their product recommendations. The typical "you may also like these items..." sort of thing that always makes me wonder what genius in the merchandising department decided that a toaster and a flashlight are ideal catalog cohorts.

Of course Amazon's recommendations have improved dramatically over the last few years - as they've exploded to dominate the online retail world. But don't assume that just because they're big and have plenty of money to spend, that they have the best of all worlds.

How Amazon's recommendations work is pretty simple. When you select an item to view (a "product of interest") their site simply queries what other shoppers in the past which viewed that same product also viewed. This is certainly an over simplification of process, but describes the core of it.

Why it works for Amazon

Amazon is able utilize this method for making product suggestions because of the incredible volume of both products and shoppers they experience. The massive amount of data collected allows for measurable variance in similar product relevance scores, filtering reasonable options to the top.

Why it won't work for you

Without a substantial volume of products and visitors (probably several thousand products, and several thousand shoppers daily), the likelihood of making logical recommendations is very slim.

Why you shouldn't care

What you may not realize is that this methodology is ultimately not incredibly effective. It's quite likely that Amazon uses this method simply because with the volume of products in their catalog, it's not financially feasible for them to use a less automated method.

The best thing you can do is understand how the current shopper defines their need, then recommend products based on that - not on what past shoppers liked. Your current shopper doesn't care about your past shoppers.

Your product recommendations can actually be far more effective than Amazon's, if you formulate a strong merchandising strategy and implement your cross-sell meticulously.

Stuck in the middle with you.

If you have thousands of products in your catalog, it's probably not feasible for you to manually set all of your cross-sell references. And if you don't have Amazon's volume of traffic, using a similar automated strategy is unlikely to be effective for you either. There is a middle ground. Suite Spot Commerce's Morphandize technology can make automated cross-sell recommendations that are the most effective in the industry!

10 BASICS OF EFFECTIVE E-MERCHANDISING

Preparing to launch a new online retail venture? Trying to increase sales on one you've already got?

Here are some basics of effective online merchandising that you should be careful to implement! Also be sure to checkout the TOP 10 MISTAKES OF SMALL ONLINE RETAILERS.

Just the basics, man:

1. THINK LIKE A CUSTOMER

2. DON'T RUN WITH TURKEYS
   

3. USE CROSS-SELL EFFECTIVELY

4. IF I CAN'T SEARCH IT, YOU AIN'T GOT IT!

   
   

5. ALWAYS TELL ME - WHY SHOULD I BUY FROM YOU???
   

6. EVERY PRODUCT’S WORTH A PICTURE

7. YOU GOTTA BE EASY

   
   

8. CREATE AN IMPULSE TO BUY

9. IF THEY WANTED TO CALL, THEY WOULDN'T BE ON YOUR WEBSITE!

10. WANT THE SALE? THEN FEED THE NEED!
    

IF THEY WANTED TO CALL, THEY WOULDN'T BE ON YOUR WEBSITE

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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Leave shoppers wondering and they’ll leave you penniless.

If a shopper wanted to pick up the phone and talk to one of your customer service reps, they would have called you to place their order, instead of shopping your website.

Online shoppers don’t want to have to call you, and frankly you’ll save money if they don’t have to. If they do have to…you lose sales.

Nine out of ten will go to a competitor, rather than call you.

Most times if a shopper has questions about a product, your guarantees, or your return policies that your site doesn’t answer – they’ll simply abandon your site and find a competitor that does answer their questions directly online. As a general rule, for every one customer that calls or emails you with a question there were 10 that had a similar question and didn’t bother to call – they just went and spent their money with your competitors.

Some types of products are so simple that shoppers can get a solid understanding of the product just by seeing a picture and a few lines of text about the product. Most products are not quite that simple, and if your product descriptions are not detailed enough you’ll be leaving shoppers with unanswered questions.

But my products are SO simple...

Take for example a t-shirt. It’s a simple enough product – short sleeves, a crew neck – it’s a t-shirt. Pretty straightforward right?

What if a shopper’s skin is irritated by fabric blends that use polyester? What if they want only apparel that is easy to care for, or wrinkle free? Do the sizes in that brand of t-shirt usually run large or small concerning fit?

If any of those details were left out of the description of the t-shirt and a shopper needs to know…you’ve just struck out on that opportunity to make a sale.

And that's a "simple" product!

If you’re retailing products that are technical or complex, you may need to have FAQ articles about how to select the right model to fit your needs, and detailed specifications of your products available to the shopper.

Information EVERY retail site should have!

Beyond product information, shoppers who are unfamiliar with your company often have some very basic questions about you as a business that will impact their decision to purchase from you. If any of these questions are left unanswered when a shopper looks for answers, chances are great you will lose the sale:

• What is your return policy?
• How long does it take you to ship out orders?
• What kind of guarantees or warranties are made on your products?
• How long have you been in business?
• What is your physical address?
• Do you have a toll-free number for customer service?
• How secure is your site?
• What is your privacy policy?

A shopper should always be able to find answers to any of those questions in 30 seconds or less.

CREATING AN IMPULSE TO BUY - NOW!

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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An effective online retailer is one who can convince the “tire kicker” to actually complete their purchase online, right now. Your merchandising must invoke an impulse to buy for the shopper.

Most shoppers are tire-kickers and best deal hunters.

For every shopper that visits your website with a clear intention to purchase a product online, at least five others visit that intend only to use the internet as research, and plan to complete their purchase in a brick-and-mortar store.

Internet retail sites are used more for research of products far more often than they’re used to actually complete a purchase.

Another habit of online shoppers who plan to complete their purchase online is to search for a single product on the websites of multiple retailers, then complete the purchase on the site of the retailer that gives them the best deal.

There are many ways to create this impulse, depending on the dynamics of your market and the supply/demand economics of your industry.

Everyone's afraid of losing.

A common and effective technique called “fear of loss” can usually be implemented. Fear of loss is messaging that indicates to the shopper the possibility that if they come back later to place their order, they may not be able to get the same product, or get it at the same bargain. If the product is difficult to find and available in short supply, simply displaying the quantity left in your inventory can create fear of loss (e.g., “get it now, only 3 left…”). Offering a special discount incentive that’s only valid today can also create a fear of loss of the deal.

Fear of loss is one of the most effective techniques, if well implemented. However, there are many ways to create an impulse to buy. You’ll just need some creativity, and a good understanding of what’s important to your target market.

If you’d like assistance coming up with some good strategies for creating an impulse to buy, contact our online retail analysts for some ideas.

YOU GOTTA BE EASY

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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In a recent poll of internet shoppers, most indicated that some of the top reasons for abandoning a retail site without placing an order included frustration with sites that were difficult to use or navigate, and sites that were slow to respond.

In order to grow your online retail venture successfully, you need to convert the maximum percentage of shoppers possible. To accomplish that, your website needs to be very easy to use, and respond reasonably quickly to each mouse click.

Some basic precepts of a highly usable retail site include (but are not limited to):

• Clear, effective navigation:

• Keep your merchandising navigation (departments) separate from your main site navigation. This immediately gives shoppers a subconscious pointer to where they can find things on your site.

• Use consistent navigation – don’t change the location of your navigation from page to page on your site, or change what the navigation options are.

• Make sure your navigation uses a big enough font, with enough spacing between lines to be fast and easy to scan visually.

• Keep it simple – never use more than 10-12 top-level departments, maximum. Using too many top-level departments makes your navigation difficult to scan and quickly browse.

• Make sure your department structure reflects the way that shoppers define their need (versus using industry terms that shoppers may not be familiar with).

• Keep your site visually simple and non-cluttered. If you want high impact graphics, have great product photography – that’s the best investment in high impact imagery you can make. Use fonts that are large enough to read easily, with enough spacing between letters and lines that it’s easy for the eye to follow.

• Use your page space effectively to minimize the shopper having to use scroll bars to view the entire contents of the page. When scrolling is necessary, always make it a vertical scroll. Avoid ever making the shopper use the horizontal scroll bar.

• Make sure that key buttons and links (like “Add to Cart”) are colored and positioned to stand out and be very easy to locate on the page. Anything you really want the shopper clicking on needs to stand out.

• Make sure that the shopper can always easily locate the link to their shopping cart, and checkout. They should appear on the same position on every page view, and should sit apart from other navigation on the page so they are very easy to locate.

• Make sure your product search feature is effective. (see the post "If I CAN'T SEARCH IT, YOU AIN'T GOT IT" to analyze your search feature).

• Make sure that when I’ve clicked into a sub-department, or to view a product detail page, there’s a link that easily takes me back to where I was previously (often called "breadcrumbs"). Also make sure I can easily navigate back to the home page.

If you’re unsure if you have usability issues with your retail site, contact our retail analysts. We’ll be happy to provide our expert opinion.

EVERY PRODUCT IS WORTH A PICTURE

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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It’s easy to understand the importance of using good product photography for items purchased primarily on visual appeal. Chances are you wouldn’t buy a shirt, or a piece of art without seeing a picture of it.

It may surprise you to know how important pictures are for products that are purchased based on technical specifications, or other non-visual merchandising.

It takes a picture to get screwed:

I consulted for a client that sells airplane fasteners – screws, bolts, nuts, rivets, etc. Each of the products had to meet certain specifications for strength, size and specific fit for a demanding application like aeronautics.

Their number one selling product – the item they sold more of than anything else was a particular type of screw that had a special ridge cut out of it. They weren’t the only retailer who carried it – almost all of their competitors sold it – but everyone bought it from them. And their price point was almost double that of their competitors.

The reason they had the market cornered on that particular screw was simple. They had a picture of it on their site. All of their competitors just listed a part number and size – assuming that since those were the most important aspects of selecting the screw, those specifications would be sufficient.

People shop visually!!!

What the competitors failed to realize is that people shop visually. Don’t just tell me the screw has the special ridge cut out of it…show it to me. Let me see that it’s the right ridge cut out, in the right place. Let me verify visually that it is in fact what I’m looking for.

No matter what type of product you sell, a visual demonstration of the product will add value to your merchandising.

If it's worth a picture, it's worth a QUALITY picture!

Obviously for some types of products, pictures are of incredible importance. And for those types of products, good pictures are important.

As an example, if you’re shopping for shirts, you want to see not only the design of the shirt, you want to see how it fits – is it a tightly tailored cut, or a looser cut? How short are those “short sleeves” really? How far does that neckline come down? These are visual cues that that can only be effectively demonstrated if the shirt is photographed on a person or mannequin.

When considering product photography, don’t think as a retailer. Think as a customer. If you are shopping for this product, what visual cues will you need? What will you need to be able to see and experience to decide on a product?

As a general rule, every product needs a picture. And every picture needs to be effective. If it’s a very simple product, or one purchased on technical specifications, a single snapshot might be effective. But, if it’s a complex product or purchased on visualization, it might need a specially posed photograph, or even multiple photographs to be merchandised effectively.

Never skimp where product photography is concerned.

ALWAYS TELL ME...WHY SHOULD I BUY FROM YOU???

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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Your Unique Selling Position ("USP") is the reason that shoppers would buy from you, instead of your competitors.

Maybe it’s your lower price point, or perhaps greater expertise in the product line, or better after sale service, or something else. Whatever your USP is, it should be demonstrated throughout the entirety of your merchandising.

I have it on my home page...

A shopper may have come to your site through a link from a search engine or another website, that directs them deep into your site. You cannot assume that a shopper will start on your home page (most don’t). If a shopper is viewing your home page, a department page with a list of products, or the details for a particular product – your USP should be clear immediately, at all times.

No matter where I am on your site, a case should be made for why I would buy from you instead of a competitor.

It's not good enough to say it, you've got to demonstrate it!

There is a big difference between claiming to have a unique selling position, and demonstrating it. You can tell me you have the best prices, but unless you demonstrate it by showing me your price next to your competitors’ price, I’m likely to take your claim with a grain of salt.

Everyone claims to be the best – you’ve got to prove it.

Assuming that price point is your USP, your department pages should list every product with your price, and a comparison price – demonstrating value. Your site’s header should probably indicate in its text or graphic composition that you have the best prices. When viewing the details of a product, I should see a case for the value of the price point as well.

Every USP can be demonstrated somehow on every page view. For example, if your company’s expertise concerning highly technical products is your value proposition – you might demonstrate that by linking buying guides, or FAQs (“how to select the right widget for you…”) from your department pages, and individual products.

Further advice:

If you have questions about how to define your unique selling position, or how to communicate it effectively, contact our retail analysts for some insights.

IF I CAN'T SEARCH IT...YOU AIN'T GOT IT.

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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Your catalog search feature may be killing you.

"In some retail segments, as much as 22% of shoppers now indicate that they *start* shopping by using a site's search feature. Nearly 40% of shoppers surveyed indicated that if they search and don't find the product they want, they leave the retailer's website without trying to browse for the product!"

Online shoppers expect immediate results. A good portion of your shoppers (especially if you’re using search engines to heavily drive shopper traffic) know exactly what they’re looking for. Many will want to search your site for the specific item they want, rather than having to spend the time browsing down your department structure to find it.

Most small retailer’s catalog search features are highly ineffective and this leads to many lost sales.

If a shopper searches your site and doesn’t find the item they’re looking for, they will assume that you do not carry the item they’re looking for.

It’s actually better to have no search feature at all, than to have a search feature that’s ineffective!

What makes a search feature effective? Ultimately a search feature is effective when it returns the best matches possible from your product selection, a vast majority of the time.

Many small retailers make the mistake of only testing it with search terms that they would use to find particular products, or types of products. It doesn’t really matter how you would search for the product – how do your shoppers search for the product?

Real world example:

A good demonstration of this is an apparel retailer that’s now a client of our company. They had always defined a particular type of shirt as a “golf shirt” – a type of shirt that’s also commonly referred to as a “polo shirt”. In all of their product titles and descriptions for hundreds of this type of shirt, they always referred to it as a “golf shirt”. The problem was that more than half of the shoppers searching for this type of product searched for it as a “polo shirt”. When those shoppers searched the site for a “polo shirt” – they had no matches to their search.

The best way to test your site’s search effectiveness is to record every search attempt to a database, recording the search phrase used and how many results the shopper got.

For any that returned zero matches, but do describe products that you carry – find out why your search feature didn’t match them.

Next, test those search phrases that did get results as well, making sure the results are highly relevant.

Any search phrases that returned more than 10 results should be checked to be sure that the most relevant items to the search phrase are at the top of the results.

I can't record site searches...

If you can’t record search data for some reason, here are some basic steps you can take to test your search feature:

1. Make a list of all of the basic product types you carry – such as “golf shirts”, “t-shirts”, “dress shirts”, etc. For each of those product types, define 3-5 other phrases a shopper might commonly use to define the same type of product. Then search your site for each of those similar product descriptions. Any that don’t return appropriate matches are costing you sales.

2. Check for common misspellings or misnomers – like “tee shirts”, instead of the correct form “t-shirts”. Shoppers don’t always spell properly, and they don’t always use correct grammar. Your search feature should be able to detect and handle common mistakes.

3. Check for plural matching. If I search your site for a product type in it’s plural form, does it return the appropriate matches? This is a common problem. If I search for “t-shirts” (plural), the search feature should be able to match it to products that are t-shirts, but don’t include the plural form in the title or full description.

4. Check to be sure multiple word searches aren’t always treated as exact phrase matches. For example, if I search for “t-shirts or golf shirts”, the search feature should be “smart” enough to figure out that I want either of the two, and not return zero matches because there were no products in your catalog defined as “golf shirts or t-shirts”.

5. Check to make sure using special characters, like quotation marks doesn’t throw off the search. For example, if I search for “men’s t-shirt” do I get the appropriate matches of men’s t-shirts, or do I get an error…or nothing at all?

6. Check to be sure “shopping experience” keywords work. Shopping experience keywords are those that define a specific group of products where if I’m interested in one group, I’m not likely to be interested in other groups. An example of this would be “men’s” vs. “women’s”. If I search for “women’s golf shirts”, I should get relevant products, and only women’s golf shirts.

7. Check to be sure brand name searches work. If I search for a particular brand of t-shirt, the search should return relevant results, from that brand. Many times inexpensive shopping cart applications do not match brand names at all, unless the brand name is in the title or full description of the product.

8. If you have a large site with hundreds or thousands of products, shoppers will need to be able to refine their search to show only results within a specific department.

9. It’s not uncommon for shoppers to use a search term that describes an entire department of products. For example, a shopper might search an apparel site for “shirts” or “socks”. If a shopper does this, how does your search feature handle it? Ideally, your search feature will indicate to the shopper that there is a whole department of this type of product that they can browse.

10. Make sure that search phrases that return more than ten results always place the most relevant matches at the top of the search results. The shopper searches specifically so that they do not have to “hunt” for the item that they want. If that item is buried in a page of 40 search results, they’re still left to hunt for it, and thus you have invalidated the entire purpose of searching.

If your search feature isn’t working effectively, it may be time for you to consider a platform that’s better designed – like Suite Spot Commerce.

WANT THE SALE? THEN FEED THE NEED!!!

Nobody buys a product unless it meets a NEED. Period.

Consider this: A man buys a Ferrari. Why? What need is he filling? If he wants a fast car, he could buy a Corvette for a third of the price. So why, a Ferrari? He probably wants to stand out, to be recognized.

A shopper buys a computer game. Why? Most likely a need to escape from real life for a while.

Every product is purchased because of a perceived need, even if the shopper doesn’t consciously realize the need they’re seeking to fulfill.

There are six basic types of need (detailed in "Why people buy things"), to which any consumer shopping mentality will almost always apply. Your merchandising messages should be centered around the need which will be most prevalent in the shopper’s mentality during their visit to your site.

Content that feeds the need

Why does one purchase a 52” plasma television? Because they have bad vision? Most likely not. How many people purchase a television that big to watch it alone? Almost none. You buy a massive television so you can have the home your friends gather to for Sunday football. You buy it to be liked, or recognized.

If your merchandising description of the television is all technical specs – you’re less likely to sell it effectively than if you feed the need:

Basic Description

Feeding the need

0.8"-thin piano-black bezel and hidden speaker system slim depth lets the 61" DLP HDTV fit where others won't. Cinema Smooth 1080p Light Engine 10,000:1 dynamic contrast ratio SRS TruSurround XT for clear, robust sound. 16 micro-second switching speed Game Mode optimizes performance 3 HDMI ports

Build the perfect home theater room around this incredible entertainment piece! Fill your room with the riveting 1080p Full HD resolution and brilliant sound of the Samsung HL-T6176S. Its 0.8"-thin piano-black bezel and hidden speaker system let you enjoy more screen and less frame; the slim depth lets the 61" DLP HDTV fit where others won't. Enjoy the crisp definition and bright imagery of Samsung's Cinema Smooth 1080p Light Engine; a phenomenal 10,000:1 dynamic contrast ratio delivers the full range of vivid colors, bright whites, deep blacks and nuanced tones. SRS TruSurround XT audio fills the room with clear, robust sound. Fast, 16 micro-second switching speed virtually eliminates motion blur; Game Mode optimizes performance so gamers will marvel at the lifelike action. Full digital connectivity with 3 HDMI ports allows digital connectivity to Cable/Satellite boxes Blu-ray players, AV receivers, and more.

Both of the descriptions above say essentially the same thing, in terms of product information. Both list the same technical specifications. Both describe the same product. But the description on the right “feeds the need”. It actually gets the shopper thinking about what it would be like – what experiences they might have – if they had THIS television.

The difference between a business manager and a merchandiser

Retailers and business people in general tend to think in black and white. We have to manage budgets and finances, inventory and suppliers, marketing plans and all the intricacies of a retail operation.

As a result, we tend to think in terms of just describing the product in its basic “black and white”. While it’s just as important that your product descriptions contain detailed technical specs for the shoppers that want to evaluate them – feeding the need is incredibly important to effective merchandising.

Designing to meet the need

Feeding the need goes beyond just your product descriptions though. Your site’s design should feed the most prevalent needs of your shoppers. If your shoppers seek entertainment – they seek to escape life for a while – and your site is dull and boring…you’re not feeding their need.

Why are Ferrari dealerships luxurious and flashy? Because they’re shoppers want to be exclusive – they want to feel exclusive when they’re buying the car.

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If you could sell Ferraris from a shack on main street…that’s how they would be sold. But that wouldn’t meet the need of the shopper, and that’s why it isn’t done.

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WHY PEOPLE BUY "THINGS"

I was flying back home a few weeks ago and flipping through the Sky Mall catalog - as I'm prone to doing since I consulted for them years ago. Page after page of "things". Some cool things, some weird things - lots of things that nobody really needs.

Or do they?

Sky Mall sells some $150M per year in stuff it seems nobody really needs.

And that perception is a major mistake that many small retailers make - they don't understand that EVERY purchase is made from a point of need.

So what need is being filled when someone purchases a "Chilled Shot Machine", or a $200 "Fold-Out Basketball Game"? Why does anyone need to buy a Ferrari?

That depends on who buys it, but every purchase is made to fill one of these needs - and understanding the prevailing needs that lead to purchase of your products will help you sell more of them.

• Physical Need - the tip-top of Maslow's Hierarchy. Food, water, shelter - the basics you've got to have to survive. Duh, moving on.

• Personal Safety Or Security - the reason a consumer buys a can of pepper spray for their purse, or a home security system, or the latest top-ranked car seat for their child.
  

• Need to be Liked or Recognized - the same set of reasons American consumers go overboard and spend themselves into dizzying debt every Christmas. Got to give little Joey the very best new bicycle so he can have the best one on the block and he'll love mom and dad even more...
  

• Need to Escape - the need behind the success of the X-Box, Playstation, Nintendo Wii, the staggering sales of the movie industry, and the vacation travel industry.

• Need to be Right or in Control - the reason your IT guy bought the greatest new router that let's him monitor *every* last packet of data that leaves your corporate network, and locked down access to Hotmail from your office, even though your company's productivity is kicking ass.

Care to guess which need the Ferrari driver filled? Maybe he's compensating for something. Surely his circle of friends wouldn't like or respect him if they knew he wasn't anatomically correct...

If you can tailor your site and merchandising - from design, all the way down to your product descriptions to fit the prevailing needs that consumers will most often buy your products to fill - you'll sell a lot more of them.

USE *LOGICAL* PRODUCT RECOMMENDATIONS

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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Anyone who has shopped a major online retailer is likely to be familiar with the concept of product recommendations, also known as “cross-sell” or “up-sell” merchandising.

However, most small online retailers either underestimate the importance of them, or don’t implement them effectively (or at all).

Effective product recommendations are very important to the success of your venture – but often not in the way that most retailers assume.

Marriage proposal before the first date.

For example, it would seem logical that if a shopper is viewing a flashlight that it would also make sense to show them batteries, and perhaps a belt holster for the flashlight. But, if the shopper has not decided to purchase the flashlight, then those recommendations are irrelevant to that shopper. You’ve tried to propose marriage before they’ve committed to a first date.

To use recommendations effectively, you need a specific recommendation strategy.

Get the first date first.

The first goal should always be to get the shopper to commit to purchasing an item – otherwise attempts to up-sell are typically wasted.

When a shopper is viewing an item, they are expressing to you that they are interested in that item, or an item similar to it. So the most effective strategy you can implement is to also show them other items from your catalog that are the most similar to the item they’re currently viewing. This way if there is something about the item they are currently viewing that isn’t quite what they’re looking for, you’re showing them other alternatives that may be a better match.

Your goal is to get them to commit to an item.

Now, ask for the second date.

When the shopper has committed to purchasing an item (meaning that they have placed it in their shopping cart) is the ideal time to up-sell them to additional accessories or complimentary items.

If the item has obviously complimentary items – such as in the example of the flashlight, batteries and accessories – those complimentary items should be offered as a “prompted up-sell” – meaning that as the shopper adds the flashlight to their cart, the site offers them the add-ons at that point.

Now go for broke!

When the shopper has the item in their cart, there may also be other items that would logically fit the customer’s mindset. In the case of the flashlight, maybe it’s a home emergency kit. This is typically referred to as “up-sell” and these types of recommendations should often be made on the shopping cart page, or as a special promotion displayed when the shopper enters the checkout process.

Never waste your breath!

Using product recommendations in an effective way can increase conversions, and increase average order size.

Ineffective product recommendations are wasted space and reduce the likelihood of a conversion.

Easy and effective cross-merchandising.

If your retail site carries hundreds of products, and lots of selection of each product type you may find the task of associating similar items daunting. Another serious challenge is that the features you determine are similar about two products may not mirror the features a shopper is looking for.

Suite Spot Commerce’s Morphandize engine greatly reduces the workload of associating similar products and always ensures that the most similar products are associated with each other – even as new products are added to the catalog.

DON'T RUN WITH TURKEYS

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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I can’t count the number of times in my career working with online retailers that I’ve heard some variation of the phrase “we do it like that because that’s how everyone else does it…”

It always amazes me how many times the competitors referenced by “everyone else” are the “average” competitors in the marketplace, rarely the leaders.

It's hard to fly with eagles when you run with turkeys.

Cliche to English translation: Successes don’t come easy to online retailers that look or act like their competition.

Online retail successes come from innovation - in products, strategy, marketing, and merchandising.

Choosing not to rise above your competition is a basic cop-out; the lazy way out. It’s lazy because it let’s your business brain off the hook to find a way to do it better.

THINK LIKE A CUSTOMER!

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One of the important BASICS OF EFFECTIVE E-MERCHANDISING.

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The most successful online retailers have all mastered this simple concept. And, while it’s simple in concept it’s not always easy – but thinking like a customer is critical to developing effective online merchandising.

Thinking like a customer must start at the very basic levels of your merchandising strategy – such as the development of your site’s department structures. Many small online retailers have a tendency to develop a department structure that makes sense to them, but often what makes sense to an industry insider will make little sense to a shopper.

A simple example.

Take for example the concept of merchandising vehicles. An auto retailer might default to creating a department structure by make and model of vehicle, like:

• Ford
• Explorer
• Ranger
• Taurus
• Etc…
• Chevrolet
• Cobalt
• Malibu
• Suburban
• Etc…

For an auto industry insider, or savvy shopper who already knows what brands and models they prefer, this department structure might make sense. But, for most shoppers who aren’t familiar with all of the makes and models and only defines their need as a “Sport Utility Vehicle”, this department structure will be counter intuitive and difficult to shop.

How do your shoppers define their needs?

Answering this basic question is a critical logic step that should be addressed at every aspect of your merchandising design.

How will my butt look in these jeans?

If you've ever gone shopping with a woman, then you've probably experienced the just-popped-out-of-the-fitting-room question (the one we men dread) - "do these jeans make my butt look big?" I don't mean to pick on women here - every guy checks the mirror to see how the jeans work for him too...we just don't ask the question!

The point is that when a shopper is shopping for jeans, there are things they want to know. They want to see fit (pictured on a human). They want to see a picture of the backside too. They want to know all about the sizing (does this brand tend to run big, or small?)

Whether you're retailing jeans, or cars, or computer components - you've got to think like a shopper. What will the shopper want to know? What visuals might they need to feel comfortable selecting any given product?

The point is - no matter what you sell – if you want shoppers to spend time shopping your site and be engaged by your merchandising, you’ve got to think like a shopper as you develop your merchandising.

If you’re having a hard time thinking like a shopper, or want fresh insights into how shoppers define their needs in your retail niche, contact us for a new perspective.

My cart doesn't "do" that...

All too often, small online retailers short change themselves and their shoppers by not implementing features because the shopping cart software their site runs on doesn’t allow the merchandising format or features that would be beneficial. This is a huge mistake that will limit your conversions and profits significantly.

RECESSION IS COMING...CELEBRATE!

Nobody of any influence wants to talk about it. The big stock analysts are avoiding it, playing it down - and what a shock - if they admit it and stocks fall as a result, they stand to lose the most.

But, try as they might to convince the nation at large that it isn't happening, the mortgage and housing market slump is going to have a substantial impact on the economy. Maybe a huge one. My personal prediction is this one's going to be a doozey.

And as the financial markets brace, consumers cringe and pundits do...well whatever it is that they do...I'm going to open a fresh beer, turn on some music, put my nose down and work with a smile.

Why? Because a recession is *good* for me. And if you're a small retailer with price point as a unique selling position, or focused on a luxury market (as most of ours are), it's probably going to be good for you too.

A broad recession will impact the middle class the most. And that means the middle class consumer will tighten their spending. They'll buy less...OR they'll seek better VALUE out of their purchases. And that will drive many of them online, where they can get great deals on the brands they love (versus switching to Wal-Mart brands).

The "upper class" (much as I hate that descriptor) will largely be unaffected. Sure some of their stock value will fall, and some will be "less rich" - but they'll still be wealthy and still purchasing luxury goods.

Good things come out of the hard times all the time. My company was born out of the dot-com bubble burst. Limelight Networks (IPO'd to the tune of $300M) was born out of the same economic downturn.

In every economic cloud there is a silver lining. You just have to pay attention, scrutinize and see the silver lining.

If you're a small retailer, prepare for the impending recession - but don't fret. Position yourself properly and you'll grab serious market share from the big dogs in your market!

IT'S A DAMN GOOD TIME TO BE SMALL!

Over the years I've been asked a number of times why Suite Spot Commerce doesn't go after bigger e-retail clients. Our platform certainly competes with the "big dogs" for functionality, and we know our stuff.

Well, I've always insisted this time would come. And now it's here. Small online retailers are gaining ground against the giants (NY Times, 12/11/07).

States the article:

The number of small- and medium-size retailers selling online has swelled in the past two years, from 21% to 32%, according to a survey by IDC, a consulting firm.

These businesses lack the huge marketing budgets of their bigger rivals, of course, but they are unearthing cheap advertising methods that, in some cases, help them compete with million-dollar promotions.

Most online shoppers are so experienced that they feel safer venturing away from Amazon to buy from lesser-known sites, said Ray Boggs, an IDC analyst. Part of the reason is that the Web sites now built by many small merchants lack the amateurish feel of a few years ago.

Amen, brother.

And we're proud to be a part of it. We're standing up to "the man". Take CarefreeCasuals.com for example. While big-box retailers announced single digit sales growth for apparel year-over-last...CarefreeCasuals.com (a Suite Spot Commerce client of course!) experienced growth of 86% over last year.

Small retailers are gaining market share. If you're not, we should talk.

THE TOP 10 SMALL E-RETAILER MISTAKES

The top 10 mistakes that lead to the failure and demise of 90% of startup online retailers.

If you're a small online retailer you probably have made, or are currently making one of these mistakes. New online retailers - learn the easy way. Read up!

• TESTING THE WATER
• HIRING THE RETAIL BLIND
• BLIND LEADING THE BLIND
• DICTATED BY TECHNOLOGY
• FISHING WITHOUT BAIT
• IF I BUILD IT, THEY WILL COME
• THE $10K MILLIONAIRE
• THE CLEAN SLATE MENTALITY
• I DON’T PLAY DRESS-UP
• LA to NY WITHOUT A MAP

IS IT MY PICKUP LINE? OR AM I JUST DULL???

If you're spending money marketing your retail site, but not getting the sales to justify your marketing investment and grow - this post is for you.

Maybe it's your pickup line. Maybe you're just dull. Or, maybe, you're trying to romance the wrong customer.

So what's your problem?

Sometimes it takes a lot of detailed metrics and focus to figure out exactly where the problem lies. Sometimes a quick analysis can point out the major areas of concern. Here's a few things to check for:

• Extreme variance in results of different marketing campaigns. If shoppers coming from organic search (for example) are converting at a much higher rate than other campaigns, it's typically a sure sign that you're either after the wrong customer (advertising in the wrong place) or that your pickup line (your ad marketing message) in the poorly performing campaigns is not kindling a romance with your potential customer. If the poorly performing campaigns are also getting poor ad click-through rates - it's probably your marketing message.
  

• Poor ad click-through rates. If ad viewers where you're advertising aren't clicking through, it's your ad message (your pickup line), or you may just be advertising in the wrong place.
  

• Very few page views per shopper. If your average shopper is making less than 3-4 page views, you're not engaging them well. If your ad click-through rates are high, then you've probably got the right shopper and pickup line - you're just engaging them with your merchandising effectively. However, if you notice that some ad campaigns have a much higher average page view count, then you may be targeting the wrong customer with the poorly performing campaigns.
  

• Lots of page views per shopper, but poor conversion to cart. If you're experiencing high page views per shopper (more than 6) but less than 5-6% of shoppers are creating shopping carts - your pickup line is working...you're just dull! Either shoppers are having a hard time finding the product they're looking for (bad merchandiser, go to timeout!) or they're finding many options that might be the right one...you're just not creating an impulse to buy, or a strong enough value proposition to close the sale. Bad merchandiser, go to timeout!

You'll find plenty of content in the Basics of Good Merchandising and the e-Retail Marketing sections of my blog to help you along the way. It can get very complex, and if you don't know where to start - we can help you!

HELP IS OUT THERE!

Not sure where to begin? Got some ideas from our blog but not sure how to implement? Suite Spot Commerce can help!

Give us a ring. 866-731-6522

Retail Site Analysis
If you have a retail site now, and are trying to increase conversions, or improve marketing results we can perform a thorough Retail Site Analysis that will tell you exactly what you need to change, and why. The cost is between $400 and $800 (depending on size of site & market). If you choose to work with us further, we'll rebate the cost of the analysis into the additional services.

Retail Site Software & Development
Suite Spot Commerce develops cutting edge online retail sites (like CarefreeCasuals.com, ChathamsFineChocolates.com, and LEOMiami.com to name a few) around our best in class online retail software. Get the power and performance of a "big box" retailer, at a fraction of the price!

Retail Site Marketing - GUARANTEED RESULTS!
Suite Spot Commerce markets our retail clients with guaranteed results! That's right - we actually guarantee your returns on your marketing budget...or your money back! Hand us a buck, we'll hand you back a buck-fifty. (Guaranteed return rate varies based on the retail market, usually with a minimum 150%)