February 18th, 2014 by Elma Jane
For Ecommerce Testing, Clarify Conversion Goals
Before you can start any testing on your ecommerce site, you need to clarify your goals. Setting the right goals is the first step to making any improvements. There’s a saying, “Whatever you measure grows.” So, make sure you measure the right thing.
Goals may seem like the obvious part. After all, you already know you want more sales, right? But there’s more to goal setting than just deciding to try and increase your sales.
The Goals Waterfall
Your goals for your conversion-optimization tests should flow from your marketing goals, which ultimately flow from the organization’s overall goals and strategy.
Business Goals – Marketing Goals – Conversation Optimization Goals.
The goals from optimization testing should follow from a company’s overall goals and strategy
Your business goals should determine your website goals, which should be prioritized to determine your leading conversion optimization goal.
The conversion optimization goal for any test should be selected based on how well it supports the website’s goals. This is often an area where there’s confusion about what are the priority metrics to improve. Don’t get off track by following website goals that don’t support marketing goals.
Prioritize Goals
Most sites will have several key goals, so you’ll need to prioritize them. You can do this in three steps.
Rank your goals in terms of their relative value to your business:
Assigning values to goals. The values don’t have to be absolutely accurate revenue-producing numbers to begin. Pick a median goal on your list, and assign it an arbitrary amount, and then estimate the relative value of goals above and below it.
Estimating actual goal values. Now, to get even better results, you can refine these relative numbers with whatever hard data you have, such as average order value, lifetime value of a customer, or the close rate and value your sales team sees when following up on quote requests. Don’t worry about 100 percent accuracy. It’s better to start testing with relatively firm numbers than to delay until everything’s perfect.
Priority Goal
1 Product Sale
2 Quote Request
3 Whitepaper Download
4 Blog Comment
5 Social-Media Profile Activity
Tracking Your Goals
Once you’ve identified your most important conversion goal for your experiment, make sure you track it. Goals are a crucial part of your web analytics setup. If you don’t have keys goals in place, you’re missing out on half the value of your various reports.
That means translating your testing goal into a technical goal trigger that will be tracked by the analytics and testing tools you’re using. The goal you track must be represented by a specific action the visitor takes on the website, like a button click or a visit to a page. Think about an action on the site that the visitors will do only once they have completed the goal.
The key is that it should be an action as close to revenue as possible. So, if your goal is to sell a product, you should track a post-sale thank you page as the goal trigger. (If you also accept phone orders, you may need to tackle some advanced tracking techniques to get reliable test results.)
Goals with values attached to them, as explained above, are the only way to find your most valuable visitors, they’re crucial for effective conversion optimization testing.
Be sure to set up ecommerce revenue tracking as well. Increasing average order value can be just as effective as boosting your sales conversion rate, and you’ll want to be able to include that in your results analysis.
A Single Goal
Web analytics tools can provide a ton of information, and it’s not uncommon for e-commerce sites to have a handful of key performance indicators. Example, you may track time on page and the add-to-cart rate, but when it comes to conversion optimization A/B testing, it’s important to focus on only the revenue-producing goals or goals for each test. Always make sure you are tracking revenue for each test variation. Otherwise, you could pick a conversion rate winner that inadvertently sells lower-value products.
Track revenue-producing goals for your A/B tests, but those other goals are still useful too. While not all web analytics goals are the best for A/B testing, they still may be helpful to generate hypotheses and explore new testing opportunities.
By paying attention to secondary goals, you can discover new testing avenues that help you get even more value from your ecommerce website.
Track as many goals and actions as you can with your web analytics tools so you can be free to explore your visitors’ behavior. Within web analytics is where you can do freeform exploration to generate ideas or hypotheses for your A/B tests. Then, validate those ideas through revenue-tracking controlled tests.
Posted in Best Practices for Merchants, Credit card Processing, Small Business Improvement Tagged with: a/b testing, accuracy, advanced tracking techniques, analytics, business goals, conversion, conversion rate, conversion-optimization, e-commerce, ecommerce, goal trigger, goals, hard data, increase your sales, marketing goals, optimization, post-sale, prioritize, revenue, revenue-producing goals, sell a product, strategy, website
February 14th, 2014 by Elma Jane
News from Target, increasing the number of cards compromised to 70 million and the expansion of data loss to mailing and email addresses, phone numbers and names, affirms that we are in a security crisis.
Card data is from a brand and business perspective, the new radioactive material. Add personally identifiable information (PII) to the list of toxic isotopes.
The depressing vulnerabilities these breaches reveal are a result of skilled hackers, the Internet’s lack of inherent security, inadequate protections through misapplied tools or their outright absence. Security is very very hard when it comes to playing defense.
There is a set of new technologies that could, in a combination produce a defense in depth that we have not enjoyed for some time.
Looking at the Age of Context (ACTs)
Age of Context released, a book based on the hundreds of interviews conducted with tech start-up and established company leaders. A wide-ranging survey. They examine what happens when our location and to whom we are connected are combined with the histories of where and when we shop. Result is a very clear picture of our needs, wants and even what we may do next.
Combining the smartphone and the cloud, five Age of Context technologies ACTs, will change how we live, interact, market, sell and navigate through our daily and transactional lives. The five technologies are:
1. Big Data. Ocean of data generated from mobile streams and our online activity, can be examined to develop rich behavioral data sets. This data enables merchants to mold individually targeted marketing messages or to let financial institutions improve risk management at an individual level.
2. Geolocation. Nearly every cell phone is equipped with GPS. Mobile network operators and an array of service providers can now take that data to predict travel patterns, improve advertising efficiency and more.
3. Mobile Devices and Communications. These are aggregation points for cloud-based services, sending to the cloud torrents of very specific data.
4. Sensors. Smartphones, wearables (think Fitbits, smart watches and Google Glass) and other devices are armed with accelerometers, cameras, fingerprint readers and other sensors. Sensors enable highly granular contextual placement. A merchant could know not only which building we are at and the checkout line we are standing in but even which stack of jeans we are perusing.
5. Social. Social networks map the relationships between people and the groups they belong to, becoming powerful predictors of behavior, affiliations, likes, dislikes and even health. Their role in risk assessment is already growing.
The many combinations and intersections of these technologies are raising expectations and concerns over what is to come. Everyone has a stake in the outcome: consumers, retailers, major CPG brands, watchdog organizations, regulators, politicians and the likes of Google, Apple, Microsoft, Amazon, eBay / PayPal and the entire payments industry.
We are at the beginning of the process. We should have misgivings about this and as an industry, individuals and as a society, we need to do better with respect to privacy and certainly with respect to relevance.
Provided we can manage privacy permissions we grant and the occasionally creepy sense that someone knows way too much about us, the intersections of these tools should provide more relevant information and services to us than what we have today. Anyone who has sighed at the sight of yet another web ad for a product long since purchased or completely inappropriate to you understands that personalized commerce has a long way to go. That’s part of what the Age of Context technologies promise to provide.
ACTs in Security
ACTs role in commerce is one albeit essential application. They have the potential to power security services as well, specially authentication and identity-based approaches. We can combine data from two or more of these technologies to generate more accurate and timely risk assessments.
It doesn’t take the use of all five to make improvements. One firm have demonstrated that the correlation of just two data points is useful, it demonstrated that if you can show that a POS transaction took place in the same state as the cardholder’s location then you can improve risk assessment substantially. (based off of triangulated cell phone tower data).
Powerful questions of each technology that ACTs let us ask:
Data – What have I done in the past? Is there a pattern? How does that fit with what I’m doing now?
Geolocation – What building am I in? Is it where the transaction should be? Which direction am I going in or am I running away?
Mobile – Where does device typically operate? How’s the device configured? Is the current profile consistent with the past?
Sensors – Where am I standing? What am I looking at? Is this my typical walking gait? What is my heart rate and temperature?
Social – Am I a real person? Who am I connected to? What is their reputation?
Knowing just a fraction of the answers to these questions places the customer’s transaction origination, the profiles of the devices used to initiate that transaction and the merchant location into a precise context. The result should improve payment security.
More payments security firms are making use of data signals from non-payment sources, going beyond the traditional approach of assessing risk based primarily on payment data. One firm have added social data to improve fraud detection for ecommerce payment risk scoring. Another firm, calling its approach Social Biometrics, evaluates the authenticity of social profiles across multiple social networks including Facebook, Google+, LinkedIn, Twitter and email with the goal of identifying bogus profiles. These tools are of course attractive to ecommerce merchants and others employing social sign on to simplify site registration. That ability to ferret out bogus accounts supports payment fraud detection as well.
This triangulation of information is what creates notion of context. Apply it to security. If you can add the cardholder’s current location based on mobile GPS to the access device’s digital fingerprint to the payment card, to the time of the day when she typically shops, then the risk becomes negligible. Such precise contextual information could pave the way for the retirement of the distinction between card present and card-not-present transactions to generate a card-holder-present status to guide risk decision-making.
Sales First, Then Security
The use of ACT generated and derived signals will be based on the anticipated return for the investment. Merchants and financial institutions are more willing to pay to increase sales than pay for potential cost savings from security services. As a result, the ACTs will impact commerce decision making first-who to display an ad to, who to provide an incentive to.
New Combinations
Behind the scene, the impact of the ACTs on security will be fascinating and important to watch. From a privacy perspective, the use of the ACTs in security should prove less controversial because their application in security serves the individual, merchant and the community.
Determining the optimal mix of these tools will take time. How different are the risks for QR-code initiated transactions vs. a contactless NFC transaction? What’s the right set of tools to apply in that case? What sensor-generated data will prove useful? Is geolocation sufficient? Will we find social relationships to be strong predictor of payment risk or are these more relevant for lending? And what level of data sharing will the user allow-a question that grows in importance as data generation and consumption is shared more broadly and across organizational boundaries. It will be important for providers of security tools to identify the minimum data for the maximum result.
I expect the ACT’s to generate both a proliferation of tools to choose from and a period of intense competition. The ability to smoothly integrate these disparate tools sets will be a competitive differentiator because the difficulty of deployment for many merchants is as important as cost. Similar APIs would be a start.
Getting More from What We Already Have
The relying parties in a transaction – consumers, merchants, banks, suppliers – have acquired their own tools to manage those relationships. Multi-factor authentication is one tool kit. Banks, of course issue payment credentials that represent an account and proxy for the card holder herself at the point of sale or online. Financial institutions at account opening perform know your customer work to assure identity and lower risk.
Those siloed efforts are now entering an era where the federated exchange of this user and transactional data is becoming practical. Firms are building tools and the economic models to leverage these novel combinations of established attributes and ACT generated data.
The ACTs are already impacting the evolution of the payments security market. Payment security incumbents, choose just two from the social side, find themselves in an innovation rich period. Done well, society’s security posture could strengthen.
Posted in Best Practices for Merchants, Credit card Processing, Credit Card Security, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Payment Card Industry PCI Security, Point of Sale, Smartphone, Visa MasterCard American Express Tagged with: big data, breaches, card data, cardholders, checkout lines, commerce, data loss, data sets, digital, ecommerce, geolocation, GPS, inherent security, Merchant's, Mobile Devices, mobile network, online activity, personally identifiable information, pii, POS, Security, security crisis, sensors, smartphone, social networks, transaction, transactional, travel patterns, vulnerabilities
January 29th, 2014 by Elma Jane
More than 60 percent of online shoppers returned or exchanged at least one item. About 95 percent of customers will go back to an online merchant and make additional purchases after a positive return or exchange experience, making managing the process important for e-commerce success.
Exchanges and returns will shortly be a hot topic for online retailers as Christmas gift recipients contact sellers in the wake of an exceptional holiday selling season. These Christmas gift recipients will want to exchange and return unwanted gifts, items that are wrong size, or even items that may have been damaged in transit.
Returns and exchanges are important for building long term customer relationships, with some 95 percent of shoppers going back to online merchants that have offered a good exchange or return experience in the past, according to data from Endicia, an electronic postage solution provider. Conversely, about 85 percent of consumers will not return to an online shop after a poor return or exchange experience, again according to Endicia.
What follows are tips for offering a better exchange or return experience for online shoppers.
Create an Opportunity
Returns and exchanges are also an opportunity to make additional sales. As mentioned above, about 95 percent of shoppers will return to an online store and make an additional purchase after a positive return or exchange experience.
Similarly, about 45 percent of shoppers will actually recommend an ecommerce merchant, again according to Endicia, after a positive return experience, meaning that taking care of an existing customers could lead to new customers too.
Consider sending each shopper who returns or exchanges an item a follow-up email, asking for feedback about the experience. Identify ways to improve the return process, and business in general will improve too.
Know the Cost of Returning
A guitarist for a popular party and event band recently ordered a new guitar strap from a merchant on the Amazon marketplace. Unfortunately, there was an error in the shipment, and the merchant apparently sent a shorter strap than expected. When this guitarist contacted the seller about an exchange, he was told that a new strap would be shipped that day and that he could simply keep the smaller strap.
This solution was great for the customer, who did not have to repackage the strap or arrange for a carrier to pick it up. He was generally happy with the experience. This was probably also better for the merchant, who might have simply been able to order a new guitar strap from its distributor for about the same cost has having the strap returned.
To make this sort of business decision, it is important to understand the real cost of managing a customer return, including the cost of the shipping and the labor necessary for processing the return once it arrives back at the seller’s warehouse. If it cost as much or nearly as much to return the item as it would to simply purchase another one wholesale, consider letting the customer just keep it, saving everyone involved time and expense.
Provide Return Instructions or a Return Label in Every Order
Shoppers don’t want to wait for return labels. In fact, about 62 percent of online shoppers want a return label included in the initial shipment, according to Endicia. Including a return label is not difficult, and many online sellers may find that the ability to do so is either built directly into the retailer’s ecommerce platform or is available via an extension to the ecommerce platform.
A second option may be to offer shoppers a simple, self-service way to print a return label from your site. This self-service option does not require the customer to contact the shipper to get authorization or wait for an emailed label. According to the Endicia data, about 61 percent of shoppers will be happy with an easy way to print return or exchange labels.
State Return and Exchange Policies Clearly
Let customers know exactly what to expect from the return and exchange process. Post clear, simple-to-understand policies on a page of the site specifically designated for returns or shipping policies.
Posted in Best Practices for Merchants, Credit card Processing, e-commerce & m-commerce, Electronic Payments, Gift & Loyalty Card Processing, Internet Payment Gateway, Visa MasterCard American Express Tagged with: Amazon, ecommerce, gift recipients, marketplace, online merchant, online retailers, online sellers, online shoppers, return or exchange, returns and exchanges, self-service
January 29th, 2014 by Elma Jane
Ecommerce and mobile-based e-commerce have grown significantly this year. Cyber Monday ecommerce sales, as an example, reached $1.735 billion originating from desktop and laptop devices, according to comScore. Even Black Friday, which is better known for brick-and-mortar retail sales, saw online spending reach $1.198 billion in the United States, again according to comScore. Mobile online spending may also have grown, as some reports indicate that mobile-based site traffic was up 55 percent around Thanksgiving.
Many ecommerce merchants are enjoying a robust holiday selling season even as some brick-and-mortar stores are seeing relatively flat Christmas sales. To ensure continued growth and success, Internet retailers may want to challenge their businesses to improve in several areas in 2014.
Retailers, however, should not rest on their current success, but rather should challenge their businesses to improve in several areas, including free shipping offers, mobile optimization, personalization, data driven decision making, and cross channel sales.
Offer Free, Two-Day Shipping
The first challenge for online sellers in 2014 may be to find ways to offer free, two-day shipping to all or most shoppers. While it is likely there will still be minimum purchase and maximum weight requirements and restrictions, online shoppers are going to expect faster free shipping options thanks, in part, to the growth in services like Amazon Prime and ShopRunner.
Consider order fulfillment services, distributed warehouses, drop shipping, or even partnerships with other retailers to help meet this challenge.
Offer Personalization and Customization
Personalization and customization could be a significant competitive advantage in 2014.
Challenge your business to finally begin offering personalization and customization both onsite and in marketing. The easiest place to start may be with email marketing. Work to segment email marketing campaigns so that they address customers by name and with relevant products and offers that are based on an individual’s or group of shoppers’ stated preferences or on-site behavior.
Taking on this challenge means that the retailer’s marketing department will need to collect meaningful information about what interests shoppers and organize separate, custom campaigns around those interests.
Put Mobile Design and Marketing First
In November, IBM reported that mobile devices accounted for 31 percent of U.S. ecommerce-related web traffic around the Thanksgiving holiday this year, and that 17 percent of ecommerce transactions came from smartphones or tablets. On average, tablet users spent more than $126.00 per order, and smartphone users spent about $106 per order.
This data shows that mobile e commerce is not simply a novelty, but rather a must have for 2014.
If an e-commerce business is not optimized for mobile sales, 2014 is the year to take on that challenge, including offering a responsive design and mobile friendly payment options.
Sell Seamlessly Across Channels, Devices
Try to think of every way that a shopper might interact with an online store, and then make all of those touch points work together in 2014.
Retailers online or in physical stores need to offer shoppers a seamless, cross channel shopping experience that makes buying things easier for the customer. To continue to enjoy success in 2014, consider offering shoppers the ability to share orders across devices, applications, and even marketplaces.
In practice, this might mean that items added to a cart in an online store show up in the cart for the retailer’s iPhone app too. Or that a customer’s order history displayed on a retailer’s site shows orders placed on-site and via a marketplace like Amazon or eBay.
Use Big Data for Big Information
In 2014, find sources of good, usable Big Data, and put the resulting big information to use.
As an example consider, Weather Trends International, a Big Data company that uses historical weather information and advanced data processing to accurately predict weather 11 months in advance. This sort of Big Data information could show a snowboard and ski retailer what sort of winter major ski resorts are likely to have next year, and could inform purchasing and inventory choices.
Similarly, knowing that a particular region is going to have a warmer than normal July and August might impact how, where, and when a clothing retailer promotes shorts or bikinis on Facebook or AdWords.
Big Data is a popular trend in business and in marketing. The concept can mean different things to different businesses. For ecommerce, retailers should seek to use Big Data to gather big information, if you will, that may be used to make better buying and selling decisions.
Posted in Credit card Processing, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Smartphone, Visa MasterCard American Express Tagged with: adwords, Amazon, big data, big information, brick and mortar, cross channel, cyber, drop shipping, e-commerce, ecommerce, Facebook, internet retailers, laptop devices, Mobile Devices, mobile friendly payment options, mobile optimization, mobile-based site, on-site, online, online shoppers, online store, onsite, personalization, retailers marketing, retailers online, shopping experience, smartphone, Smartphones, tablet, tablets
January 21st, 2014 by Elma Jane
Myths about seniors abound. Among them are that most seniors are poor, they don’t shop online, and they only buy necessities. Yet statistics show that this overlooked segment of our society has money to spend. Ecommerce vendors that can reach out to older Americans can be richly rewarded.
Conventional wisdom suggests that when seeking customers, ecommerce merchants should pursue teens and people in their twenties. These are the people who own the most electronic devices, are the most comfortable with technology, and do the most online buying. However, you may be overlooking a large and neglected segment of the U.S. population that is eager to spend money online — people over 50.
Advertisers ignore them, concentrating mainly on the 18 to 34 age group. Nielsen, the research firm, estimates that only about 5 percent of advertising dollars are directed at seniors. Merchants too tend to offer products that appeal only to younger shoppers. Marketing efforts are directed mainly at this group.
Why Target People Over 50?
Quite simply there are a lot of them and they have money. Nevertheless, brands focus on the under 50 age group. Yet the almost 78 million Baby Boomers in the U.S. — those born between 1946 and 1964 — are fairly affluent, well educated, comfortable with technology, and willing to try new products. They were raised in a spending-driven economy, unlike their parents who grew up during the Depression.
Indeed, according to Nielsen, Boomers’ online habits are similar to those of the 18 to 34 age cohort. Boomers represent 38.5 percent of all consumer packaged goods expenditures. Research firm Ipsos, in cooperation with Google, conducted interviews with 5,100 Boomers and seniors in April 2013 and found that while the most common reason to use the Internet was to find out about the news and weather, 57 percent shopped online in the prior month and 45 percent looked for coupons or daily deals.
As a society, we tend to stereotype seniors. The only advertising directed at them emphasizes physical infirmity. But older people do buy things other than pharmaceuticals, adult diapers, and scooters. Even those who are retired have disposable income. According to the U.S. Census Bureau and Bankrate, a financial services company, Americans over 50 account for 77 percent of all financial assets, and 54 percent of total consumer demand. They comprise 47 percent of all car sales and 80 percent of luxury travel purchases. They also buy toys, games and electronics for their grandchildren.
According to the 2010 Census, there are 51.6 million Americans aged 60 to 84 comprising 16.6 percent of the population and 41.9 million between 50 and 59 years of age. Statistics from the U.S. Bureau of Labor Statistics show that approximately 18.5 percent of Americans age 65 and over were working in 2012. This percentage will likely increase in future because of erosion in traditional pension plans, a decrease in the value of financial assets, and the uncertainty of 401K plans. Working people need clothing, cars, and electronics.
The results of the 2012 Pew Internet & American Life Project Survey showed that over half of those 65 and older are online and 70 percent use the Internet on a daily basis. However, persons over 75 do not use the Internet very much. But the age group right behind them is comfortable with the Internet and when they reach 75 they will likely continue to use the Internet for email, research, and shopping.
Thirty-four percent of those over 65 visit social networking sites, while 86 percent use email.
What do Older Shoppers Look For Online
U.K. research firm Shoppercentric advises that seniors look for quality and value over bargains when shopping. However, they do tend to use coupons and discounts.
In most cases, it’s not necessary to change your website or your product offerings to attract seniors. It is simply a matter of letting them know that you are interested in their business. Many online businesses find that partnering with organizations such as AARP and offering a discount is a good first step in attracting older customers.
Seniors have the inclination and time to perform extensive research before making a purchase decision. Be sure to provide detailed information about your products and services. Visuals are helpful too. Seniors like to do online research on hobbies, vacation destinations, auto, and appliance purchases. They also rely on the Internet for health information.
Seniors are receptive to email marketing. They are more likely to respond to that than other online forms of communication.
Is Millennial Purchasing Power Overestimated?
Merchants who target people in their teens and 20s may be overestimating the purchasing power of this segment of the population. A substantial number of them are living with their parents, are underemployed or unemployed and don’t have a great deal of discretionary income. In 2012, 36 percent of the country’s young adults ages 18 to 31— the Millennial generation — were living in their parents’ home, according to a Pew Research Center analysis of U.S. Census Bureau data. Of those still living with parents, only 29 percent were employed. Millennials may actually have considerably less purchasing power than Baby Boomers and seniors.
Posted in e-commerce & m-commerce, Electronic Payments, Financial Services, Internet Payment Gateway Tagged with: bargains, ecommerce, electronic devices, email, financial services, Merchant's, online businesses, online buying, shop online, shopped online, spend money online
December 30th, 2013 by Elma Jane
Earlier this year, American Express offered its cardholders free permanent membership in ShopRunner, a service that gives its members free, two-day shipping at several retail sites. Similarly, PayPal recently tested two-day free shipping offers with a few retailers, whereby shoppers could get free, two-day shipping without an annual fee if they simply checked out using PayPal. The offer had no minimum purchase requirement. Now, Global payment firm MasterCard announced that its customers will receive free, two-day shipping from five of the Internet’s leading retailers. MasterCard also offered a premium service that extends the free, two-day shipping offer to other online merchants. MasterCard joins American Express and PayPal in offering customers free, two-day shipping options at select online retailers.
Collectively ShopRunner, PayPal’s offer, and MasterCard’s recent move may be part of what some in the retail industry are calling the Amazon Prime effect, which is a trend to faster, free shipping services driven in part by Amazon’s Prime service. These offers are changing customer expectations, so that merchants, regardless of size, may need to change free shipping offers to reflect the two-day service available from Amazon Prime, ShopRunner, and now MasterCard.
MasterCard Offer Aims at Large Retailers
To take advantage of the MasterCard offer, shoppers must register at a special MasterCard site, sign in and shop from the site, select two-day shipping at checkout and of course, pay with a MasterCard. Customers will have to pay for the two-day shipping upfront and email the order confirmation to MasterCard to be reimbursed.
Regular online shoppers may purchase an annual subscription for $69.99, extending the free, two-day shipping to about 30 larger retailers, including Nordstrom, J. C. Penney, Home Depot, and GameStop. The premium annual subscription also raises the maximum limit from $500 for six months to $1,500 per year.
The “Free Shipping by MasterCard” offer features five of the retail industry’s best known merchants: Best Buy, QVC, Macy’s, Kohl’s, and Walmart. Online purchases made from these sellers can earn free shipping up to $20 per purchase and $500 maximum over a six-month period.
Implications for Small, Mid-sized Ecommerce Merchants
Free shipping is now or, at least is becoming a key to online ecommerce success. As an example, Forrester Research’s U.S. Online Holiday Retail Forecast 2013, which was released on November 25, found that many online shoppers will leave a site and not buy anything if there is not a free shipping offer available.
Customers may look at shipping as an extra cost or even a waste of money, which is different from how they calculate the gas and inconvenience of going to a store or mall. Even offering free shipping with a minimum purchase can make customers feel better about the checkout process.
Where MasterCard’s offer is different is that it is increasing the expectation around how long a package should take to arrive, and, perhaps, changing how sellers need to think about free shipping.
When an ecommerce retailer purchases pay-per-click advertising, invests in email marketing, buys banner ads, or even prints a brochure or catalog to include in the shipping box, that retailer is investing to acquire or keep customers.
When it comes to accounting for these marketing investments, pay-per-click advertising, as an example, is often taken as part of marketing expenses generally and not attributed directly to a single transaction. For this reason, it is possible that merchants are losing money on some particular orders because of the advertising and promotional expenses associated with those particular orders, but making a profit overall thanks to spreading out marketing costs over all orders and generally increasing the total number of orders and reorders.
Ecommerce businesses may need to start thinking about shipping costs, even two-day shipping costs, in a similar way, not necessarily associating these costs with individual orders, but looking at the business as a whole to see if the free shipping offers are increasing profitability or market share company wide.
New Opportunity for Payment Providers
Free, two-day shipping offers also represent an opportunity for payment companies, like MasterCard, since these free shipping offers could give a particular payment service a competitive advantage. After all, most shoppers will choose the payment card or payment option that provides free shipping over other payment choices.
For the most part, PayPal, American Express via ShopRunner, and now MasterCard are focusing on large retailers, but there may be another opportunity with small and mid-sized online merchants.
Posted in Credit card Processing, e-commerce & m-commerce, Electronic Payments, Point of Sale, Visa MasterCard American Express Tagged with: Amazon, American Express, catalog, checkout, ecommerce, free, macy's. kohls, marketing, MasterCard, Merchant's, online, online merchants, pay-per-click, PayPal, purchases, qvc, retailers, shipping, shoppers, shoprunner, site, walmart
December 30th, 2013 by Elma Jane
Alternative Payments and Ecommerce Conversions
There’s no shortage of alternative payment choices: eBay’s PayPal, Google’s Wallet, Visa V.me, and MasterCard MasterPass, to name a few. There is also a proliferation of alternate contenders, as mobile shopping threatens to disrupt traditional methods of payments.
Alternative payment companies each claim that their payment method increases conversions. My company, SeeWhy, performed an independent analysis and confirmed these claims.
In this study data shows significant increases in conversion compared with credit cards, peaking at a 101 percent increase on smartphones.
But this is not the whole story. While these increases are impressive, they only applied to around 15 percent of traffic, so the impact on your site’s overall conversion rate will be much less. Depending on the characteristics of your site you will probably see somewhere in the region of 5 to 10 percent improvement in your site’s overall conversion rate, which is still significant enough not to be ignored. As mobile commerce grows, then alternative payments will become ever more important.
However, before embarking on an alternative payment implementation, there are three important considerations you need to take into account.
1. How Many Alternative Payment Methods?
Choosing only one alternative payment method might be tough, so why not implement several, and cover the market more thoroughly? This may be a valid approach, but think carefully before choosing this option.
For example, RunningShoes.com has implemented PayPal, Google Wallet, and MasterPass as alternative payment options.
The problem is that offering payment choices can create four different competing calls-to-action, as you can see. Whenever consumers are faced with too much choice, indecision tends to follow.
This is also problematic when you consider the whole page. There are lots of visual distractions to the primary call to action, which in this case is the red Secure Checkout button.
Before embarking on implementing multiple calls-to-action, consider how you are going to solve this issue. One route you could consider is to suppress the alternate payment methods for returning customers if the customer always pays by credit card, for example. Or if the customer always purchases by PayPal, show the PayPal button most prominently, and hide the others under a Show alternate methods of payment link.
2. How to Implement
Not all sites will see significant increases in conversion when implementing alternate payment methods. The main reason for this is that implementations can be done badly. One of the primary benefits of these payment methods is that they enable visitors to bypass the billing, shipping, and card entry steps on an ecommerce site. This is especially important for mobile sites, where entering these details using fingers and small screens defeats all but the most determined.
However, many sites implement these payment methods as an alternative only to entering the credit card number. You can see this here on Barnes and Noble ‘s site, where you are forced to enter shipping and billing information before being presented with the PayPal button. This may be a simpler implementation to do than providing an alternate checkout path, but it is frankly a waste of time, and surprisingly prevalent in PayPal implementations.
The correct method is to implement the alternative payment method as a button at the start of the checkout process, probably on the cart summary page. You can see a good example here of this at PacSun.com, an apparel site, but note the competing calls-to-action problem here as well.
PacSun deals with this slightly differently on mobile devices by not offering V.me. as a payment alternative. This avoids having a four choice vertical list of competing calls-to-action.
Alternative payments can undoubtedly result in higher conversions. However, to be effective they need to be implemented correctly to provide an alternative checkout flow, not simply a payment alternative to credit cards. This takes more effort to implement, but it is worth it. Implementing one payment method properly is a better route than superficially implementing multiple payment methods. This is especially true for mobile sales where the goal is to eliminate data entry as much as possible and alternate payments can do this very effectively. As mobile commerce becomes more important, so will alternative payments, for all merchants.
3. Which Payment Method?
Since there are multiple choices, the obvious route is to adopt PayPal. PayPal claims over 30 million U.S. mobile customers, and over a 100 million active accounts…which is a larger base than any of its competitors. SeeWhy found that 34 percent of U.S. consumers shopping online had PayPal accounts as of July 2013.
However, PayPal also carries some baggage. Having grown up as a payment method of choice for eBay, its reputation is not always considered positive. Some consumers are wary about PayPal, having had negative experiences in the past, probably with smaller merchants on eBay. In fact, according to SeeWhy’s analysis, two thirds of PayPal account holders state that their preferred payment method is a credit card.
Merchants selling luxury items might want to consider alternatives before implementing PayPal because of its reputation issues. Google Wallet is an alternative that is growing fast in part because of the growth of Android smartphones where a Google Wallet account is required to use the Play store, the Android equivalent of the app store. Google Wallet can also be linked to Google+ social sign on, so if you are considering implementing social sign on as well this might be a route to consider.
Both Visa’s V.me and MasterCard’s MasterPass both hold significant potential but the companies are only just beginning to roll out their service. It’s also worth noting that both Visa and MasterCard are rolling out their services through the acquiring banks. This will cause a proliferation of payment choices, leading to complexity and confusion for the shopper. You can see this already with MasterPass where having selected the Buy with MasterPass option, you are then presented with an array of different MasterPass wallets to choose from. Currently there are only six options, but what happens when there are hundreds?
Posted in e-commerce & m-commerce, Electronic Payments, Mobile Payments, Smartphone Tagged with: billing, calls-to-action, card entry, checkout, conversion, credit cards, e-commerce, ebay, ecommerce, electronic, google, MasterCard, masterpass, mobile commerce, mobile sales, mobile shopping, payments, PayPal, process, screens, shipping, smartphone, visa, wallet
December 20th, 2013 by Elma Jane
Third-party Cookies vs. Consumer Privacy
Some interesting tools that consumers and businesses should be aware of. As consumers, we will likely see more opportunities to opt out of online activities that collect data about our behaviors. We could also see more tools that allow consumers to provide more accurate information.
The Drive to Personalize
Most every ecommerce merchant uses data to personalize shoppers’ experiences. Some common personalization tactics are:
Present upsell and cross-sell offers.
Online merchants use first-party information from their own databases and cookies to track shopping behaviors. They also purchase third-party databases that help predict behavior and products that will appeal to a specific target shopper. Similar methods have been used with offline direct marketing for years. Online tools like third-party cookies…i.e. cookies left by a domain other than the one a user is visiting…and deep data mining have made the practice easier.
Retarget shoppers who have visited a store but did not make a purchase; Segment and personalize merchandising offers in your online store. Target emails at selected consumers who are more likely to buy a certain product;
When used properly with ad networks and ecommerce personalization and recommendation engines, third-party databases increase conversion rates and average order values. They also increase customer loyalty by providing a better customer experience.
Data Collection
Most of the data is now collected with third-party cookies or other means that consumers have opted into, even if they did not necessarily think of it that way. Every time you agree to a license agreement, for example, it’s likely that you are agreeing to share your data in aggregate and anonymously with third parties. Most companies put that in their agreements to protect themselves in the future, regardless of whether they collect the data now.
If third-party cookies are eventually eliminated, there will likely be some type of replacement system that will provide similar functionality. In fact, there’s already a scarier method of tracking consumer behaviors…using digital fingerprinting techniques that profile your computer.
This technique is virtually impossible to block as other devices can see things like your operating system, browser type, your fonts, screen size and depth, time zone, cookie settings, browser plugins, and http header information. The good news is that the use of fingerprinting is relatively small. But, some observers believe this will be a future alternative to third-party cookies.
Tools for Consumers
Axciom, one of the larger data providers, is now offering a tool at AboutTheData.com that allows consumers to see information that Axciom has collected about them and actually correct it if they choose. The bad news is that you have to provide Axciom with even more information than it already has to view the information it has on file. However, you can also choose to opt out of its databases.
You will need to create a login and answer a series of questions to verify your identity. Once that is done, you can review your data, which is broken into several categories.
You may be surprised by the amount of information Axciom maintains. Realize that this is just one of many databases that have information about you that is used in online and offline applications.
Posted in Digital Wallet Privacy, e-commerce & m-commerce, Electronic Payments Tagged with: anonymously, average, browser, cookies, customer, data, data mining, databases, digital, domain, ecommerce, fingerprinting, identity, license agreement, loyalty, offline, online, operating system, opted, order, privacy, purchase, Rates, shoppers, values
December 19th, 2013 by Elma Jane
10 Great Ecommerce & Mcommerce Ideas
Address Commonly-asked Questions
Instead of hiding commonly asked questions on an FAQ page somewhere on your site, display these answers in plain sight. Include your service agreement on every page, and provide frequent updates on orders in the mail, because one of the quickest ways to lose shoppers and sales is to make it difficult for them to do business with you.
Connect with Pinterest Influencers
Connect with the Pinterest influencers…accounts or boards with large followings…that relate to your product category. Ask for a pin here and there for a product you believe they would like. You’ll get large amounts of traffic, sales, and repins from their large followings. This method is repeatable and much quicker and cheaper than building a large following yourself.
Don’t Forget Comparison Shopping Engines
You’ve got a great ecommerce website. But is it hard to get traffic? Comparison shopping engines (CSEs)…like Google Shopping, Shopzilla, NexTag, Pronto, and Bing…deliver millions of shoppers to product pages every day. You list your items on the CSEs where purchase-ready shoppers will see them and click through to your site to complete the transaction. CSEs typically have a pay-per-click pricing model, and many merchants find it’s worth the cost.
Emphasize Product Photography
Whether you use high-quality renderings or actual product photography, make sure you take the time to present your products in the best possible manner. With the proliferation of product and photo sharing sites like Pinterest, The Fancy, Instagram, and OpenSky, having a beautiful product shot is imperative. Lifestyle shots of your product in use could also significantly increase conversion rates.
Make Research Easy for Prospective Buyers
Research (for buying decisions) is a massive resource cost to businesses around the world. It is also a primary reason for lost deals. Were you to provide comprehensive information that was easy to find and on which a buying decision can be made, then your close rate would substantially improve. Add to this, an easy purchasing process and, rather than scouring the web, a buyer would see your site as a preferred source.
Mimic the Brick-and-mortar Experience
Regardless of what channel they may be using to shop, online consumers are demanding the quality of the brick-and-mortar experience. They want to zoom in on a product, rotate it, change its colors…in short, they want to interact with the item as though they were physically in the same room with it. Retailers with rich interactive media that can offer this in omnichannel have a significant competitive advantage during the holiday season and can convert at rates of 30 percent higher than those that don’t.
Offer Support via Social Media
Nielson research discovered that in 2012 one-third of social media users prefer to contact a company via social media than by phone. On your support pages, provide links to your social media profiles. Set up notifications in the social media accounts so you know when someone contacts you. This way you provide timely customer support to those who want it…in the way they want it.
Stay Ahead of the Curve
“It doesn’t take a lot of time for cutting-edge to become old hat. Keep researching to be aware of the latest tools and technology. If you stay still, you will find that your competitors will quickly surpass you.
Take the ‘E’ out of ‘Ecommerce’
Retailers need to realize that the lines of commerce have been, as John Donahoe, CEO of eBay, said, obliterated. It’s no longer a world of online and offline commerce. It’s just commerce. Retailers are competing on a global scale with everyone, everywhere. You need to give shoppers a compelling reason to buy from you. Find a way to differentiate and make sure you can grab shoppers attention and keep them coming back.
Think Like a Shopper
Keep your site’s design simple and clean, make calls-to-action clear, and focus on the product. Go through the flows of your site: search, browse, and buy a product, or have a friend do it and watch him without helping. Pay attention to areas where anything is confusing, doesn’t work the way it should, or takes too many steps. Then make adjustments.
Posted in Credit card Processing, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Mobile Payments Tagged with: brick and mortar, buying, channel, consumers, conversion, convert, customer support, e-commerce, ecommerce, interactive, m-commerce, mcommerce, media, omnichannel, online, orders, photo, product, profile, purchasing, retailers, sales, shopping, site, social media, transaction
December 19th, 2013 by Elma Jane
NTC’s BIG DATA
Improving Collection and Analytics tools to Create Value from Relevant Data.
Big data is a popular term used to describe the exponential growth and availability of data, both structured and unstructured. And big data may be as important to business…and society… as the Internet has become. Why? More data may lead to more accurate analyses. More accurate analyses may lead to more confident decision making, and better decisions can mean greater operational efficiencies, cost reductions and reduced risk.
With NTC Virtual Merchant product, it captures email addresses at the Point-of-Sale (POS) into a database to assist merchants and consumer stay connected, and for future Marketing.
In understanding Big Data For Merchants, NTC’s President Mark Fravel, provided a general overview of how online merchants can use Big Data. Large amounts of seemingly random data from many sources…can be used to create competitive advantages.
Necessity of Analytical Tools
Collecting Big Data is the easy part. Storing, organizing, and analyzing it is much more complex. One seam of data that several experts identify as a particularly rich, emerging source of information can be as diverse as CRM software, AdWords, and your own website. Mobile communications, including text messages and social media posts such as Facebook and Twitter. Making sense of it can be overwhelming without analytical tools. These tools facilitate the examination of large amounts of different types of data to reveal hidden patterns and correlations that are not otherwise easily discernible.
A good example is NTC, they could analyze data on visitor browsing patterns, login counts, phone calls, and responses to promotions…they can monitor to eliminate what isn’t working and focus on what does. Some of the off-the-shelf analytic solutions are so finely tuned, they can tell a vendor whether it needs to offer a 25 percent discount or if a 15 percent discount will suffice for a particular customer.
Association rule learning is another analytics method that is a good fit with Big Data. This could be, for example, a shopping cart analysis, in which a merchant can determine which products are frequently bought together and use this information for marketing purposes.
Uses of Big Data Analytics:
Big Data can be most useful in analyzing a customer’s shopping and purchasing experience, which can help a merchant in the following four ways.
Become more efficient by alerting you to merchandising efforts that are ineffective, and products that are not selling.
Encourage more purchases by presenting existing customers with complementary items to what they’ve purchased previously.
Enhance inventory management by eliminating slow-moving items and increasing the supply of fast-moving merchandise.
Example: A top marketing executive at a sizable U.S. retailer recently found herself perplexed by the sales reports she was getting. A major competitor was steadily gaining market share across a range of profitable segments. Despite a counterpunch that combined online promotions with merchandising improvements, her company kept losing ground….The competitor had made massive investments in its ability to collect, integrate, and analyze data from each store and every sales unit and had used this ability to run myriad real-world experiments. At the same time, it had linked this information to suppliers’ databases, making it possible to adjust prices in real time, to reorder hot-selling items automatically, and to shift items from store to store easily. By constantly testing, bundling, synthesizing, and making information instantly available across the organization…the rival company had become a different, far nimbler type of business.
Increase conversion rates by better identification of successful sales transactions.
Is Big Data Analysis Affordable?
NTC Data Storage is also a good alternative for small ecommerce merchants because it is relatively inexpensive and is scalable it can expand as data requirements grow.
Relying on data-driven decision-making is crucial in industries in which profit margins are slim. Amazon, which earns increasingly thin profit margins, is one of the most effective users of data analytics. As more Big Data solutions for small online businesses come to market and more online merchants incorporate Big Data into their business tool set, employing Big Data will become a necessity for all Merchants.
Using data wisely has the potential to boost margins and increase conversions for online merchants, and investors are banking on it.
This is Big Data for NTC we know WHO, WHAT,WHEN, AND WHERE a purchase took place.
Posted in Best Practices for Merchants, Credit card Processing, e-commerce & m-commerce, Electronic Payments, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Point of Sale, Visa MasterCard American Express Tagged with: analyses, analytic, big data, communications, competitive, consumer, cost, database, decision, ecommerce, email, internet, marketing, Merchant's, mobile, monitor, ntc, online, orgainizing, patterns, point of sale, POS, profit margins, promotions, risk, scalable, solutions, storing, text messages, virtual merchant, website
