SPECIAL COMMENTARY
By Michael Lambet, CEO of MerchantAdvantage
Well, here we are at the end of 2008 and everyone is either holding their breath to see how things went, or shouting expletives about what they already think they know. As with all matters of such magnitude, the online retail environment had some bumps, and some interesting growth as well.
After a quick review of some serious statistics by comScore– I was pleased to see the online retail segment that we address almost doubling in volume over last year. In the face of our current economic setting this is no small feat.
In one portion of the statistics e-commerce revenue was divided into “Referral Tactict” categories such as: Search, e-mail, Comparison Shopping, Coupons and Other. As a preliminary statement they note that over 33% of online sales activity occurred through a referral mechanism as listed within their Referral Tactic categories, and this overall statistic is up a few percentage points from last year.
You can, and should review their detailed stats when you have the time, but I found this particular chart enlightening. Quickly, the tactics and parameters were – Search which was down a few points (no surprise there), e-mail was up a bit, Comparison Shopping was almost double the previous year, Coupons were up slightly, and the “Other” category was down.
SEARCH – Sales referrals from Search is one category, and I didn’t see a clear distinction between SEM and SEO. In either case, the measurement as it stands shows a subtle drop. I believe there are two main factors that lead to this drop:
- Monthly cost of SEM in click costs has gone up (though not necessarily the cost per click) and SEO fees are up as well (to the firms hired to “enhance and optimize”, and
- Merchants have become more savvy about tracking click to purchase conversions, and are diverting efforts to those that they know will convert.
EMAIL- Email has grown in percentage points, despite the “DON’T SPAM ME” epidemic. It really just goes to show you that there is a way around virtually every marketing obstacle. With appropriate email partners such as Blue Hornet and Vertical Response, there’s no reason retailers shouldn’t be re-marketing to their existing consumers. So, revenues caused by emailed referrals was up from 11% last year to just over 16% all “referral tactic” based marketing for online retailers.
COMPARISON SHOPPING – We prefer the acronym CSE be translated as Consumer Shopping Engine these days. But, this category jumps from 2.5% of referral based revenues to 4.7%.
This number may be a bit deceiving as it shows itself as the percentage of all revenues, but not all online retailers use CSEs. So, the question arises, of those merchants using CSEs, which percentage of their referral based revenues are attributed to CSEs? Obviously more than 4.7%. So, it’s great being a part of a company that helps merchants market in a segment that is becoming more and more successful.
COUPONS - Coupons went up, but from 1.1% to 1.8%. I think that coupon sites have gotten a bad rap; the thought being that only cost conscious consumers (sometimes called bottom dwellers) use them. True or not, these are consumers you likely would not have found as they do not frequent your site, nor do they necessarily frequent Consumer Shopping Engines or any other more traditional marketing venues.
There are a few pricing models, but none of them are expensive, and once you’ve got a cost conscious consumer, you presumably have convinced them that you provide a cost effective product line. So, re-market to these humans… All in all Coupons are clearly becoming a more popular venue.
OTHER – Hmmmmmm. Well, I am an advocate of using unique methods and exploring your options. Further, Web 2.0 and other new “inventions” have really come a long way. So, in general I’d say the “Other” category should have gone up. But “nay nay” says comScore.
I would suggest that random and lesser known parts of the “Other” category brought down some of the more successful components of the other grouping. Product reviews, blogs, and the like seem to be doing well for those merchants with the time to pursue such efforts. I am wondering how much of the “Other” category is Print, billboards or even standing out in the street and yelling. Anyway, this ever so broad category was down from 28.7% to 22.9% - which I think is a significant amount, even if it doesn’t really suggest any particular call to action.
Although the 2008 Holiday shopping season grew ever so modestly (6%) over 2007, I think too much focus is placed on the “Modestly” and “Holiday” season words, and not enough on 2008 vs. 2007.
Perhaps online retailers need to look more at the rest of the year (9% growth) as an area of focus. Online retailers, and retailers in general have simply accepted that November and December are THE MONTHS to make all the years revenues look good. They were never happy about entrusting two months for their overall annual profitability. And yet that consistently is where they look for the big bucks. Why slight those other pleasant months by not giving them your attentions?
Even if your individual profits only grew 6% over what you would have made without additional efforts, that can often offset a somewhat disastrous holiday season. And if that disastrous season don’t happen, papa’s gonna buy you a brand new wagon! (translated: all the better for you).
So, I guess what I’m trying to extrapolate from this information is that sometimes you have to fight the fights that you can win, and that may not be so seasonal as you thought.
-- Michael Lambert, CEO, MerchantAdvantage
Extreme E-tail: Sell the Product, Sell the Search, Sell the Space
This is a great article to prepare for the ecommerce holidays. Yes, the holidays are right around the corner for e-commerce merchants.
- Chip Arndt
E-Commerce Times
August 12, 2009 - "The holidays are months away, but e-tailers should already be well under way in planning how to best take advantage of the November/December traffic surge. Now is the time to look at ways to drive your site's incremental revenue with tactics like adapting brick-and-mortar practices to the Web and monetizing your in-site search results page...."
Click here to learn more...
Posted by Chip Arndt on August 15, 2009 at 07:11 AM in Ad Word Marketing, Customer Relationship Management, E-mail Marketing, Guest-Expert Commentary, Online Storefront Tips and Advice | Permalink | Comments (2) | TrackBack (0)
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