With the number of online retail sales expected to grow to a whopping $271.6 billion by the year 2011, companies simply can’t afford to fall out of favor with their Web shoppers. Here’s what businesses need to bear in mind as they strive to keep their customers happy during the holiday crunch:

Manage your inventory. “Adequate inventory is something e-tailers can have difficulties with if they experience a spike in demand,” warned Michelle Warren, a senior research analyst with Info-Tech Research Group.

Keep tabs on your technology. Unanticipated spikes in online traffic can send an e-tailer’s servers crashing — and Web shoppers running elsewhere. For this reason, Warren advised to “consider working with your solution provider to ensure that you have the right amount of technology in place.”

Reach out to consumers. With an increasing number of retailers taking their wares to the Web, companies must reach out to consumers as the holiday season approaches. Marketing initiatives from email blasts to direct-mail campaigns remind shoppers of a company’s online presence and can help drive traffic to a Web site.

Enhance customer support. With more online transactions taking place, more questions and concerns from consumers are likely to arise. E-tailers can prepare themselves by bolstering their customer-support channels. A seasonally-augmented contact center for example, can ensure customers’ queries are addressed within a reasonable amount of time.

Hold off on experimenting. If there’s one thing experts can’t seem to agree on, it’s whether or not companies should introduce brand-new CRM capabilities during the holiday rush. “That’s a big debate,” Warren said. “There’s a whole line of thinking that Christmas is the ideal time to test out new technology, but there’s another line of thought that says test it out when it’s not so busy.” Warren recommended companies err on the side of caution and hold off on deploying that new “live chat” feature, for example, until customer demands have tapered off. If, however, the temptation is too hard to resist, be sure to thoroughly investigate the difficulties that can arise.

Prepare for returns. Christmas festivities are only the beginning of the holiday crunch for today’s e-tailers. After all those orders have been placed and packages shipped, e-tailers should be prepared for a steady flow of product returns.

With the right precautionary measures and technologies in place, e-tailers can secure a permanent spot on Web shoppers’ “nice” — rather than “naughty” — lists.

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A frighteningly long list of retail closures came across the transom during the last few days, and while I haven’t yet fact-checked every point (stay tuned for links, chronology, etc.), I quickly found enough supporting material to merit republishing and amending the list.

The sheer breadth of the damage here is breathtaking. The bloodbath crosses every kind of retail sector, and is clearly not just a reflection of the tough times we’re in, but a harbinger of worse times to come.

Every closed retail location may represent eventual savings for the company involved (after shouldering the actual costs of the close itself, that is), but also represents dozens or even hundreds of out-of-work employees (who are, after all, someone else’s customers), reductions up the supply chain, and rent and taxes removed from that store’s local economy.

In other words, this is bad news with ripple effects that will be felt for months and years to come. (For starters? According to one report, “Consumers will lose $100 million this year on worthless gift cards, from restaurants and stores that have gone belly up.”)

Things don’t look like they’re going to be getting better any time soon given the following news reported in an AP article today…

Consumers nationwide are reeling from job losses, tanking investment portfolios and sinking home values. They are expected to hunker down further in the coming months, making it likely the economy will continue to shrink through the rest of this year and into 2009, more than fulfilling a classic definition of a recession: two straight quarters of economic contraction.”

The Commerce Department’s updated reading on the economy’s performance showed gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter, weaker than the 0.3 percent rate of decline first estimated a month ago, and the worst showing since the third quarter of 2001.

One has to wonder how online shopping will impact all of this. Maybe the retailers with a strong online selling model will be hurt less then those without one. For the detailed list of planned retail store closures, click here.

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When a customer places an order through a retailer’s web site, what is the last thing they see? All too often it’s just an order reference that they’re asked to print out and keep in case anything goes wrong, according to Philip Williams of NetFidelity UK, who suggests that e-retailers are missing a vital opportunity.

The post-sale web space can be used to develop additional streams of passive incremental revenue without actually having to sell more products at the time. It’s a space where consumers are already in the ‘buying mood’. At that time they usually feel good because they’ve just bought something they need or want. It’s the perfect place, NetFidelity argues, to encourage repeat purchases.

Lost revenue

A recent study by Verdict Research found that UK e-tailers have the potential to generate an estimated extra £818 million each year through the introduction of this kind of post-transaction revenue model.

There is some truth in the statement that the online world is different from the offline world, and so it needs a whole new set of tools. But the marketing principles remain the same: put a relevant offer in front of somebody with a meaningful incentive at an appropriate moment and you stand a better chance of creating a sale than if you were to fire off unrelated random advertising.

Three post-sale stages

In the world of online retail, so much focus has been put into getting consumers to visit the online store, followed up by e-mails and e-zines trying to build customer relationships, that an important opportunity in the life of the customer has been missed: the “post-sale real estate”. This stage can be broken into three time periods: immediate, short term, and long term:

• The immediate is the moment immediately after the customer has completed an order;
• The short term is the period shortly after the sale when the customer is waiting for delivery, and then starting to use the product or service;
• The long term refers to the weeks and months after a customer has received and paid for their goods.

Offer a post-sale incentive

We are now seeing the development of sophisticated e-mail messages, relevant offers at the point of sale, meaningful e-zines, and the use of loyalty programmes and points schemes. Among all this there is the immediate post sale space that remains largely underdeveloped, and this is where NetFidelity’s own technologies and programmes aim to generate revenue and encourage shoppers to return to a site - an activity that costs nothing to do, but has enormous potential value.

In the future, web sites will generate passive income from something that at the moment is an operational necessity. The offer will not detract from the essential message, and actually offers customers a practical benefit (e.g. “thank you for shopping with us - here’s a £10 voucher for next time you buy from us”).

And the long term space, both on and offline, are very similar with the objective being to maintain a meaningful relationship with customers and either encouraging a change or reinforcing particular behaviour. This is largely focused on a series of relevant offers using endorsed direct mail or e-mail, loyalty points programmes, or offers based on known demographics. The development of sophisticated messages and direct marketing has become the norm, and programmes designed to reactivate dormant customers remain a ‘holy grail’.

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The Christmas season is well underway for retailers, which means customer service departments will be facing a battle to maintain standards.

With many customers shopping online for the first time, as well as those internet shopping veterans who will turn out in great numbers, etailers must ensure that they provide a positive experience to encourage repeat business.

We’re big on the subject of customer retention here at E-consultancy, so what can an e-commerce firm do to keep shoppers satisfied and coming back for more? How can the internet play a part in all of this?

E-commerce companies should consider the following, to boost customer satisfaction while reducing those expensive offline support costs that can devour margins… and remember, it isn’t too late to introduce some of these - there are some quick wins here…

1. Provide comprehensive FAQs - This can help customers quickly find the answers to their queries about shipping, returns policies etc. A searchable FAQs section that covers every conceivable question will enable customers to get answers more quickly and take the pressure off customer service staff.

2. Allow customers to email - Customers may have a query that isn’t covered by the information available on the site. Customers may dislike having to call customer service departments, so provide them with an email alternative.

3. Ensure a speedy response to emails - Some surveys have found that customers sometimes have to wait 2-3 days before their emails are answered. This is not good enough, especially during the festive season when customers need to know when their goods are arriving. Not answering emails quickly enough will also increase pressure on call centres.

4. Increase staffing levels - This will be the busiest time of year, and online customer service departments may be dealing with five times the volume of emails, as well as extra customer calls, so ensure that you have enough staff to deal with the rush.

5. Personalisation - Personalise email responses to customers – this will reassure people that someone is directly answering their questions.

6. Acknowledge the receipt of a customer email - This will eliminate needless customer frustration by ensuring that their questions are being dealt with.

7. Detailed Product Pages - As with providing a good FAQs section, providing accurate and detailed information on product pages can avoid the need for customers to call or email. Provide detailed information of delivery costs and times, as well as general information about the product on offer.

8. Returns policy - Making your returns policy as simple and flexible as possible, by allowing customers to return product bought online to a store, for instance, will avoid unnecessary hassle, and may give customers more confidence to buy.

9. Exceed expectations - Mistakes are bound to happen, but it is important to deal with them well and exceed customers’ expectations. For example, if you fail to deliver an item, then don’t just apologise for the error, but offer the item discounted or free of charge.

10. Invest in online customer service technology - The market for online customer service solutions is growing at 50%, and such technology can benefit online retailers in a number of ways. The cost of the average customer interaction by telephone is estimated to be between 20 and 40 times more expensive that a web self-service interaction, so this investment can pay off for retailers.

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As part of Shop.org’s Annual Summit, Forrester Research Senior Analyst Sucharita Mulpuru delivered a keynote address that resoundingly argued against the conventional wisdom that online retail may have already seen its best days.

“Some think e-commerce has peaked,” Mulpuru said, citing recent news reports from sources such as MSNBC.com (”Online Shopping Growth to Slow in Next Decade“) and The New York Times (”Online Sales Lose Steam“). But Mulpuru believes that e-commerce still holds great potential — in fact, she predicts an approximate 25 percent year-over-year growth for both 2007 and 2008.

The Web 2.0 era has delivered very sophisticated functionalities, Mulpuru told the crowd, but the growth she’s predicting will not come by depending on technology alone. In her keynote, Mulpuru described many online retailers as “running before they can walk” because they are so caught up in what’s new and complex — such as videos and podcasts — that they haven’t yet nailed down the fundamental attributes of their online presence.

When businesses begin to really focus on what they’re offering and how they want their customers to interact with them, Mulpuru noted, solutions will become readily apparent. To that end, she addressed what she called the five pain points of e-commerce — and said that dealing with them is essential to maintaining a successful online presence:

1. Not Available 24/7. First, contrary to the inherent purpose of shopping online in the first place, online retail still isn’t user-friendly. Mulpuru reported that her research has found that the number-one reason people shop online is for the convenience, followed by selection, then by price. Web sites should be available and working 24/7, Mulpuru said, adding that that one out of every 50 online transactions fails because of a retail error.
2. Mismanaged Marketing Resources. Second, Mulpuru said that online marketing is inefficient in terms of what its resources are focused on. Mulpuru calls for an industry-standard definition of return on marketing investments and what profit means for retailers. She questions the extravagant amount of marketing spend devoted to paid search (41 percent, according to her figures), claiming that the costs are outweighing the revenue, particularly for nonbranded terms. Finally, she said, marketers need to focus on customer retention and building customer loyalty rather than customer acquisition.
3. Failure to Listen to Customers. Third, marketers need to listen to their customers instead of simply “watching” them. Mulpuru noted that most marketers (73 percent) react to the actions of their competitors. Instead, marketing staffers should work to understand the behaviors of the customers — especially to determine why customers act the way they do.
4. Poor Organization. Fourth, the organization of many Web sites is poor — that makes it difficult for consumers to navigate and find relevant products. Mulpuru noted that while the tools to help increase relevance exist, they are rarely implemented.
5. Lack of Channel Coordination. Last, retailers have yet to coordinate and maintain their multiple channels. Mulpuru reported that conversions achieved through cross-channel sales can be up to three times greater than through offline channels alone.

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IT has to justify every dollar it spends, so it’s crucial to understand how technology investments drive business results. Yet analysts and IT leaders say many companies still don’t calculate ROI on either individual online functions or their overall Web sites, leaving uncertainty about the sites’ effectiveness and what could be improved.

However, there are best practices for measuring Web site ROI. Those practices mirror the considerations and calculations used to rate the success and effectiveness of any other IT investment.

Defining ROI

ROI is really a measure of what a company cares about, says Michael Kogon, CEO of Definition 6, a consulting and IT services company in Atlanta. “If you measure everything but still don’t know what’s important, then you can’t measure return,” he says.

For a useful measure of ROI, Kogon says, understand the business objectives behind the site and then measure the site based on achievement of those goals. A professional services firm, for example, might have a Web site objective of attracting new customers. It could measure the number of white paper downloads, because experience shows that a certain percentage of potential customers who read a firm’s white papers are likely to become actual customers.

However, ROI needs to look at costs as well as benefits, says Megan Burns, an analyst at Forrester Research. “What does it cost to build this functionality and to maintain it? What does it cost to be used? How many people use it? What’s the alternative if we didn’t have it on the Web site, and how much would that alternative cost us? That’s the kind of thinking you have to have,” she says.

Beyond Purchases

Take, for example, a retailer’s Web site. The retailer can easily determine the value of a purchase online compared with the investment it takes to handle that sale. However, it can also calculate the value of, say, the store-locator function, because a certain percentage of Web site visitors who use that feature will actually go to a brick-and-mortar store and spend money that they might not have spent otherwise.

“What ROI models allow you to do is run through the ‘what if’ scenarios so you know if it’s falling on the positive or negative side and by how much,” Burns says.

Toward Better Decisions

Understanding such ROI dynamics is key to making better decisions about Web site functions, design and, ultimately, spending, says Forrester analyst Harley Manning. “The question isn’t how much you’re spending; it’s, what kind of return are you getting for your investment?” he says. “If I say it’s going to cost you (US)$3 million to redesign your Web site, you’ll say, ‘Wow, that’s a lot of money.’ But if I said, ‘Our Web site generates $12 million in net profit, but we can increase the conversion rate and generate $37 million in net profit with a $3 million investment,’ you’d take that deal any day.”

Check out the complete source article for more detail and examples.

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If you’re new to the search engine optimization game, you’ve probably heard a bit about the paid subscription keyword research tools, but you might not have had a chance to play with all of them. While Wordtracker is probably still the most popular tool, Trellian’s Keyword Discovery tool offers up quite a few options that make it a must-try service for any business that is serious about their search engine marketing.

The Keyword Discovery tool does cost significantly more than Wordtracker at about $70US per month or $600US for a year verses Wordtracker’s roughly $275 per year cost. That said, it also delivers significantly more data.

Like most keyword research tools, the Keyword Discovery tool’s standard results will show variations of the phrase that you enter as your starting point. It will also list the number of times a phrase has been searched for in Keyword Discovery’s data source during the last twelve months. Much like Wordtracker, users can then expand this data in order to gather estimates of the number of other web sites that feature this phrase and the number of times Keyword Discovery predicts that this phrase is searched for daily.

What makes Keyword Discovery such an interesting tool is the ability to create charts that examine keyword trending and market share by search engine.

Another great option offered by the Keyword Discovery tool is the market share data. As with the trending data, these charts can be launched simply by clicking on a small image next to the data for each search term.

These are just a few of the powerful options available with the Keyword Discovery tool, but they can go a long way toward helping you tailor your search marketing efforts for maximum return on investment. To learn more, you can try out the free trial version.

Check out the source article for a number of chart and graph examples and a more complete explanation of the output options. Also, a free trial of Wordtracker is also available.

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The following was noted in Increased Online Shopping Activity During the Holidays May Put Consumers at Risk for Internet Threats:

A newly published survey conducted by Harris Interactive and commissioned by Check Point Software Technologies, makers of the popular ZoneAlarm Internet Security Suite, reveals that most online adults (84 percent) do not feel safer when computing online this year compared to last year. Yet holiday shopping continues to proliferate, with the number of shopping transactions nearly tripling during the holidays.

The survey shows that most online adults (91 percent) shop online, and many (39 percent) do so at least once a month. Online shoppers, on average, complete about 2 shopping transactions in a typical month. However, this figure nearly triples to about 6 shopping transactions during the holidays.

During a year when cases of identity theft and security breaches topped the headlines, the survey also revealed that online adults may not be taking the necessary steps to secure their personal computer (PC) against Internet threats. About three in four online adults (74 percent) have not installed a hardware firewall, and about half (53 percent) have neglected to install a software firewall. Less than one in four (22%) have installed a security software suite to protect against spyware and viruses.

When making purchases online, 97 percent of online shoppers use their credit card to complete transactions, however, 44 percent do not always check for security symbols when making purchases.

“As we begin the holiday shopping season this year, we want consumers to understand that Internet security is no longer only about protecting your PC, it’s about protecting you. Even with all the hype surrounding ID theft and hacking attacks, the online population is still largely unaware of steps to take in order to protect themselves,” said Laura Yecies, general manager of Check Point’s ZoneAlarm consumer division. “Defending oneself online takes a multi-pronged approach, with Internet security software being the first line of defense. It’s also critical that consumers arm themselves with the knowledge to combat the social engineering tactics such as fraud and e-mail phishing.”

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The Business Opportunities Weblog directed me to Jennifer Baljko’s Guide to Improving Your Online Sales Conversion Rate.  Here are several excerpts:

You’ve set up an Web site, developed some marketing efforts to bring in traffic and are seeing the number of page views increase. But are you converting your Web site visitors into customers?  It’s time to work on your sales conversion rate, in other words, the number of visitors to your site who go on to place an order or fill out a form that leads to a sales call or take some other action you want. For example, if a site generates 200 sales a month and receives 10,000 visitors, the conversion rate is 2 percent.

By improving your sales conversion rates, even just slightly, you will:

• Boost sales


• Encourage repeat visitors


• Optimize your Web strategy to work harder for you

Here are Jennifer’s recommended action steps:

Know where you stand - The first thing you need to know is how your current online sales model is working. Do a baseline analysis of what sales are already coming in through the site.

Make the path to conversion easier - Visitors may leave your site because site navigation is too difficult, there are limited payment options or, worse, there is no compelling reason to buy whatever is being sold. The easier your site is to use and the more it appeals to visitors, the higher your conversion rate will be.

Keep traffic coming in - The more people that come your site, the more chances you’ll have to win a sale. Customers looking for a specific product will usually punch a keyword into a major Internet search engine and browse the sites that most appropriately meet their needs. Make sure your company’s name pops up as one of the top potential sites.

Be sure to check out the source article where Jennifer shares her best contacts and resources for getting each of her recommended action steps done.

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The following was noted in Online Retailers Leaving Money on Table:

Up to 67 percent of consumers who have visited an online store to make a purchase have left without doing so because of a lack of information on the product, according to a survey.

Only 36 percent of online shoppers prefer shopping online rather than in stores, but 83 percent of those polled said they would buy more online if retailers were to add more interactive and interesting ways to display and purchase products, according to a new report from rich media applications provider Allurent, Internet Retailer writes.

Some 68 percent of consumers reported browsing online stores more now than in the past, even if they don’t intending to buy - presenting an opportunity for retailers to turn browsers into buyers.

Among features selected that would encourage online purchases were shortcuts (cited by 86 percent) such as express product information and pageless purchases (viewing the cart while being able to get product details and images as well as add the item to the cart); 360-degree product views (78 percent); the ability to customize a product from a catalog of options (74 percent); customer-generated product reviews (73 percent); product zoom (71 percent); and color selection (65 percent).

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