45 years ago, the Advanced Research Projects Agency Network (ARPANET) arranged a cannabis sale between students at the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology. It is described as the seminal act of e-commerce. Then, in 1984, UK Grocer Tesco launched the first business-to-customer online shopping system with Mrs Snowball, aged 72, being the first home online shopper.
We’ve come a long way since Mrs Snowball’s first online purchase.
The online marketplace is wildly different today from the one we started with, and even from the marketplace of 10 years or even just 5 years ago. So, what have we learned, what myths have we busted and what truths have stuck in that time? Well, after some passionate conversations with other CMOs, I've discovered that the three golden rules of e-commerce have become somewhat warped:
It’s not all about conversion
For years, we’ve heard the mantra: Convert! Convert! Convert! Of course, conversion remains important. But online retailers and banks, amongst others, are slowly and steadily relaxing their once laser-sharp focus on conversion rates. Why? Because there’s a problem - conversion tells us very little.
Conversion, as we’ve said before, is a tiny one-dimensional piece of data in a world that’s huge and multi-dimensional. As marketers, we’ve always looked at conversion simply because it’s easy to measure - but it tells us nothing about experience. You could have 20% of your customers converting on the very first site visit, and a massive 80% who are only converting after multiple visits. So understanding whether users are having positive or negative experiences and interpreting the intent behind every interaction is infinitely more valuable than cold, flat data from conversion rates.
This was the scenario facing 1-800 Contacts, the largest retailer of contact lenses in the United States. Before customers can order, they need to supply prescription information for their contact lenses. 1-800 Contacts aims to make this step as convenient, smooth and easy as possible by providing visitors with options on how they can enter their prescription. Quantitative analytics showed that most visitors were making use of these options, yet one option had a surprisingly high incompletion rate among visitors.
Taking advantage of drill-downs from the web analytics and site optimization segments, 1-800 Contacts investigated this mystery and found surprising insights into points of visitor friction. They leveraged their focused insights and tight workflow integrations to dramatically enhance the online customer experience, across all channels. This not only directly impacted top-line revenues and customer lifetime value, but also delivered outstanding 115% annual return on investment.
It’s not all about a site’s functionality
A recent EMarketer report says we can expect retail e-commerce sales to reach an impressive $4.1 trillion by 2020. However, owners of online shops face a very serious problem on their road to success: competition. E-commerce hasn’t stopped growing and isn’t showing any signs of slowing down. With this mind, acquiring new and retaining customers is getting much harder.
Simply, the design of digital properties needs to be better - they need to be more than just sitting pretty. They have to satisfy and involve visitors, keep them loyal and stand out from the crowd. Reading another report, we can see that personalization is a driving factor for loyalty for about 50% of customers.
My advice? Don’t be afraid to be different. 56% of people claim they would improve their perception of a brand if provided with a personalized incentive. Different is essential for the modern day digital brand.
It is all about data
“CMO’s don’t care about data" - something I hear all too often, and it couldn't be more wrong.
Data matters across every business - data has brought marketing and tech teams closer together and that’s why I care. Big data is bigger than ever and we have more information on our customers too. This is good, because today’s customers are more demanding and are asking more of brands - they require a more complete experience. As a CMO, data allows me to gain insight into the practices, styles and profiles of customers. It helps me understand which outreach strategies work and which fail, and arguably most importantly, the reasons why.
It’s never just about the numbers, but if you can understand the story behind those numbers, and act to improve experiences based on the insights those numbers are pointing to, there's nothing that matters more.