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E-Commerce Sales: We Can Do Better Than 9%

VP site only SLI head shotEach year, online sales take a bigger slice of the “total retail sales” pie. In 2014, analyst firm Forrester expects e-Commerce sales in the United States to reach $294 billion, still a small 9% slice of all sales in the country. That means that 91% of retail sales still occur in brick-and-mortar stores. The question is: Can e-Commerce do better? Can e-Commerce grab a larger slice of that pie by making simple changes?

A recent large-scale study on e-Commerce search by the Baymard Institute answers with a resounding YES but notes that there is still a long way to go before this happens:

“When e-Commerce search works, it’s fast, convenient and efficient. It’s no wonder that so many users prefer searching over clicking categories. Unfortunately, our recent study finds that search often doesn’t work very well,” said Christian Holst, Baymard Institute Co-Founder. For example:
  • 16% of e-Commerce sites do not support searching by product name or model number;

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  • 18% of sites provide no useful results if the product name was off by a single character;

  • 60% of e-Commerce sites do not support searches with symbols or abbreviations; and

  • 70% require users to search by the exact jargon for the product type that the site uses, failing to return relevant products. (For example “blow dryer” if “hair dryer” is typed.)

Site search users convert between three and four times higher than the average site visitor. Imagine how much higher this figure could be with search that works. When customers land on e-Commerce sites, they have two real expectations: (1) They want to find the products they are seeking, and (2) they want to do so as quickly as possible. Getting this right is how e-Commerce retailers keep customers coming back and ensure they remain loyal to the brand.

Before e-Commerce can really take a bigger slice of that pie, retailers need to optimize their site search. The second step to driving online sales is to use site search data to understand exactly what customers want (in their own words) and to deliver it to them.

The search box offers great behavioural data that can help retailers understand shoppers’ language, experience, and changing market conditions (e.g. new product introductions, trends, seasons and shifting customer demographics) to make informed merchandising decisions. Consistent with Baymard Institute findings, a study by SLI Systems conducted last year found that e-Commerce brands were not leveraging site search data and missing big opportunities to drive sales:

  • Nearly 60% were not using site search data to enhance marketing campaigns;

  • Only 25% integrated site search data into email marketing to better customize offers;

  • Only 27% created SEO landing pages populated with site search results and custom banners; and

  • Only 13% took advantage of site search to power mobile search.

Online retailers should be continually monitoring search reports, such as the top keyword searches, which indicate products of high interest and the words visitors use to find them. Another important report is keyword searches that return poor results, which highlight phrases for which customers are searching and then receiving a poor experience. Monitoring these phrases can help in planning for future inventory purchases, potentially changing product descriptions, or providing alternatives to visitors. By regularly watching search analytics, retailers can learn a lot about their customers and in turn create more relevant and engaging online experiences that boost online conversion rates, increase average order sizes and grow online revenue.

In fact, amid generally weak second quarter earnings, the retail giants that did announce spikes in e-Commerce sales ranked as having excellent site search in Baymard’s search study. For example, Wal-Mart saw its e-Commerce business grow 21% globally in the third quarter. This heavily contributed to a $3.2 billion increase for the company.

Additionally, many retailers that made it onto the prestigious Internet Retailer 500 — which ranks the 500 largest U.S. e-retailers based on web sales — achieved unprecedented results with improved e-Commerce search. After optimizing site search, multi-million dollar schools supplies retailer Lakeshore Learning’s online revenue increased 30%; and gourmet gifts retailer Harry & David, a $400 million company, experienced a 7% increase in conversion.

The e-Commerce industry can do better than 9% and it can start by making the simple changes of optimizing site search and using that rich site search data to improve merchandising and enhance marketing campaigns. When it does, online shopping experiences will dramatically improve and e-Commerce will gain a greater share of the $1.7 trillion retail pie.


 

Shaun Ryan is CEO of SLI Systems, an e-Commerce acceleration provider for mid- to large-size internet retailers and B2B sites worldwide. To learn more about how e-Commerce sites can use site search data to create merchandising strategy that entices users to buy, download the free white paper Use Site Search Data to Improve Merchandising.

 

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