Few Direct Paths to E-Tail Purchases
Consumers might just type in the URL of a favorite e-commerce
site to do some shopping online, but the vast majority make their way to purchase
from some other destination. That is the finding of a study by GSI Commerce
and Forrester Research.
According to the findings, 77 percent of hard goods
and 82 percent of soft goods bought online during last year’s Christmas
selling season started with a search, an email or some other stimulus.
The
research found that many shoppers in the study were exposed to multiple marketing
messages before making a purchase. Forty-five percent of hard goods and 53
percent of soft goods required at least two contact points before the buy was
made.
Email and search are the two most effective means to drive purchases with
40 percent of hard good transactions and 60 percent of soft good purchases
starting from either of those two sources.
Interestingly, social media was largely
ineffective in online sales generation. Only two percent of holiday sales were
connected to social sites. The one bright spot with social media was directly
related to the sale of soft goods between Thanksgiving and Cyber Monday.
“While hard goods retailers in this study experienced no change in the
number of orders that resulted from links from social sites, soft goods retailers
experienced a 45 percent lift in orders that resulted from those same types
of links on Cyber Monday versus during the rest of the holiday season. The
limited time nature of web holiday deals during these key dates likely compelled
shoppers to share such messages with their friends,” the report stated.
Fiona
Dias, executive vice president of strategy and marketing for GSI Commerce,
told Mashable, “The best analogy is in the South; a lot of people go
to church on Sunday. If you go with the theory that you should market where
the people are, then you should be running off to market during church services.
Facebook has the same analogy. Buying things from retailers is maybe 10th on
the list of things they want to do on Facebook.”
Discussion Questions
Discussion Questions: What is the most effective means of driving consumers to websites to make purchases? Do you believe consumers are moving up “buying things” on the list of things they are looking to do on Facebook and other social media sites? What are some good practices for getting consumers to share deals via social media?
Very interesting. I have data also that suggests that the mystique surrounding Facebook is questionable as a high marketing priority.
I believe the data have the ring of truth but I want to add something. While search is the most direct source of traffic, it is also misleading because most traffic comes from people typing in the name, i.e., they are too lazy to type in the full URL so Google, etc, is just the navigation device. Hence, search does little to create demand. Display ads can create demand and offer scale. Forget the low click rates…that is simply the wrong measure.
The most effective way to drive customers to make a purchase on a website is to offer a significant discount with a brief expiration period. Communicating that offer can involve the website, email and social media.
Research has shown that consumers “Like” commercial Facebook pages when they receive or think they will receive something for free (a local dry cleaner offered a $10 credit to everyone who Likes their FB page) or a significant discount (the way airlines have flash sales to fill planes a few days before the flights).
If the deal is big enough consumers might tell their friends via social media. Manufactures and retailers can facilitate this communication through buttons on FB, websites and email that allow consumers to instantly share the offer with friends.
Email and search have more influence than social on traffic and purchases. This has been found by GSI/Forrester, Outbrain and others. But before we draw broad conclusions, keep in mind the following:
1. Consumers see multiple marketing tactics. If the influence is based on “last click,” tactics like email and search do disproportionately well.
2. Driving consumers to sites and driving them to buy are different things. Searching suggests commerce, social suggests recreation. Social is effective for awareness.
3. Existing buyers are more influenced by CRM such as email because (1) they have opted in and are more likely to view and (2) their purchase/browsing history enables more relevant recommendations.
4. Social media participation and associated marketing are still ramping and evolving.
For me, the most significant finding was how few shoppers arrived at sites directly. Marketing was absolutely essential. Accordingly, marketers should not over-invest in social marketing until they have solid search, email, and display marketing. The former should have already become line items in the budget, while social is still in the experimental category.
The most effective way for me to drive to a web site to make a purchase is upon the in-person word-of-mouth purchasing satisfaction of a friend or associate with parallel values I trust. Otherwise I research various sources on my own and look for the best prices or discounts for items that my research has revealed.
Fiona Dias’ analogy is perfect. Every marketer thinking Social Media is the key to the marketing future should consider this simple proposition or start marketing at Sunday church services. “A lot of people go to church on Sunday. If you go with the theory that you should market where the people are, then you should be running off to market during church services. Facebook has the same analogy. Buying things from retailers is maybe 10th on the list of things they want to do on Facebook.”
Social Media is personal and personally controlled. While there may be a choice by some to use it for commerce, the online shopping drivers aren’t a whole lot different form the brick & mortar drivers, except the connections may be coming from different sources.
A shopper is looking for something specific…For on-line it is search. As shopper is prompted by a special…For online it is email. A shopper browses a favorite store…For online it is the retailer’s website.
The best way to drive people to your online site or sites is through a barrage of in-store flyers, bag stuffers, and special incentives, such as a pound of chipped ham for 99¢ if they download your flyer from the website. We just posted our ad on our area chamber of commerce, and now consumers can view it all week long. It is free for members to post, so it makes good sense.
Our employees have been trained to let our customers know about the posting of our ad, and so far I like the results. Key chains or pens with the website as freebies are another way to do this, and some companies will help offset the cost by putting their brand name on the pen or key chain as well.
I believe it will take several months to get the word out.
Good luck to all!
Email and search are the two most effective means to drive purchases…social media was largely ineffective in online sales generation. Only two percent of holiday sales were connected to social sites.
Hopefully this means we will hear less about the latter (though somehow I doubt it). I might add, too, that the most important step is having the “right” merchandise in the first place (and, conversely, not trying to bait-and-switch with the wrong merchandise)…few things are as annoying as blind/misleading links, and–for me at least–they pretty much destroy any chance of doing business in the future.
The statistics are good. They are likely accurate. Based on two sites where I track traffic, the numbers are nearly identical to those quoted. Coincidence? Probably not.
The two methods with the highest numbers–email and search–do have distinctly different characteristics. Even within the email factor their are different methods of which to connect. As a search being the highest, it’s critical to have a strategy to fully take advantage of creating visibility to your site through the engines. Tagging and keywords are essential. With unlimited budgets, a full SEO strategy can move a retailer to the top level of a search on almost any product, service or information. However, even with a limited budget or no budget at all these methods can be utilized with still good results.
With email, there is an assumption that you have access to customer email addresses. That’s great if you have it. If you don’t there are many sources of effectively acquiring them and even targeting the correct customers through services. Depending on the services used provide these addresses, quantity, reliability, and targeting–costs can range from very inexpensive to the sky is the limit.
I have found that at least 60% of email contacts actually hit the sites I have been involved with. This is an exceptional response rate. However, the intent of the email and the type of site are factors in its effectiveness. Nevertheless, the vast and overwhelming majority of hits come through search. Learning and developing a consistent strategy on effective search results is essential. Consistent measurement of activity and page views as a result of visits directed from search can give great insight to consumer interest and what has been effective marketing or use of words and tags that drew them there in the first place.
Retailers that are not intensely and consistently evaluating the information available to them on their site traffic are missing a huge opportunity. The data is available for free. It’s fascinating and extremely informative about your customers, how they are finding you, the devices and methods they used to find you, as well as what they were interested in. Absolutely fascinating!
As a side note, what I have found is that Facebook and Twitter will require a presence, however, they are not anywhere near the top (at least at this point) in being effective traffic drivers. However, a strong word of caution. That holds true only based upon the market you are in. In some, they are significant sources of information about the product. In the automotive marketplace they are very significant. In others, not so much. Internet Retailer has found that 61% of social network users discuss automotive and automotive product related issues and of that 26% make a purchase as a result of recommendations from the same social networking. In that market, it’s worth paying attention–a lot of attention.
This is great information – new to me and contrary to my personal online shopping habits – but endorses the megabucks I pay the Google search engine to support my proprietary ecommerce websites. However, these findings don’t seem to take into account “consolidators” such as Amazon.com, eBay.com, Overstock.com, Froogle.com, and many others. When you navigate to those sites to search for a product, is that counted as a “search” or a “destination?”
I sell exclusively via websites to customers in 98 countries. Google is our pathway. Facebook and other social media are not even minor blips on our customer-contact radar screen. But that’s just our companies, in a very specialized field.
Being an inveterate shopaholic, I go to Froogle.com for items outside the offerings of my trusted favorite websites. But, I constantly learn new lessons. Recently I had a need for 2mm, white, ceramic ball bearings (don’t ask). I began my search on Froogle, but “surprise-surprise-surprise” (Gomer Pyle), I wound up on Amazon.com for the exact product I wanted!
I’ve found that the best ways to get consumers to share their experiences with my products and services are printable testimonials, tell-a-friend programs, and affiliate programs. Social media hasn’t entered the promotional picture for us yet, unless you include face-to-face, phone-to-phone, or email-to-email. Are they still considered “social media?” Seems like they should be.
From years of hands-on experience, I must take exception to Max Goldberg’s assertion that “The most effective way to drive customers to make a purchase on a website is to offer a significant discount with a brief expiration period.” It simply isn’t true. Sometimes it works for commodity-type products, but our decades-old online marketing team has found that unique products with superior service plans, or commodity products at competitive prices all the time with exceptional service, sell best. Are there any ecommerce website operators out there who would contradict this?