Without Trend Data, Web Commerce Still Is E-Hype
Hi-tech doesn't necessarily equate with good quality. E-commerce, electronic retailing, online marketing and direct marketing over the Internet are all different ways to "sell stuff over the Net." It boils down to a really good idea -- and seems to work.
But, here's the rub: How can you build a business if you don't know your consumers' buying patterns? Answer: You can't.
If e-commerce is supposed to be the "wave of the future" and it doesn't get some serious help, throw your surfboard back in the closet because this wave may downsize to a mere ripple.
Traditional brick-and-mortar retailers and direct marketers who take orders from a telephone call center can get pretty good real-time consumer traffic information.
Store managers know that when check-out lines are long, "average order" transaction size declines. Grocery shoppers will shorten their shopping lists and time in the store to get into an express lane rather than waste time standing in a long line.
Direct marketers who track time spent in the queue from call center data observe a similar pattern. The sound of the customer hanging up is painful, but fixable. In short, retailers constantly trouble-shoot their stores. They can make necessary adjustments such as opening a new check-out lane or providing overflow services for call centers when the needs arise.
So, how do cybermerchants "eyeball" consumer traffic patterns in their stores and make adjustments? How can they get a snapshot of Web-surfing data, such as where the consumers came from, how long they stayed, where they went and how they moved through a site?
These data, along with various other details, are available to the sophisticated Web order taker who carefully tracks and analyzes both the ad source keycode and the average order size from actual orders in a customer database.
But what about the information from consumers who didn't order? Web merchants automatically collect gigantic Web log files with megabytes of ones and zeros. Big deal, but small peanuts for results.
Bottom line, these InterNet marketing gurus still lack the simple consumer information any Main Street retailer can get by looking at his parking lot or counting his customers and comparing this "eyeball" traffic information with his cash-register receipts.
There is hope for the Internet marketer -- but it seems quite a way off. The biggest hurdle may be the public furor over privacy rights. Despite some public alarm, use of individuals' information does not constitute a major privacy threat. An individual's data are a tiny part of a larger pattern. What Web retailers want to establish is online consumer behavior patterns. Particles of consumer information when collected together produce a pattern or trend.
Traditional retailers rarely, if ever, look at an individual consumer transaction from the data they collect at check-out scanners. They do track daily and weekly sales trends by product category and by brand.
Thus far, Web marketers have employed the methods used by traditional media advertising and in-store marketing to understand and track consumer Web behavior. Consumer behavior is projected based primarily on educated guesswork and small-scale surveys, which have been generated from "projectable" samples of consumers who have visited or bought things from Web stores.
Our biggest e-commerce future opportunity is to give direct marketers the ability to research and understand consumers with true "database precision." Precision database marketing from Web-generated data is a great long-term goal.
We all believe that in the future there will be a Jetsons robot equipped with a log file analysis program that will be superior to a store manager's gut instinct ... but we're not there yet.
Dave Ahl is general manager of Direct Media's Catalog Link request service on the Web and heads the Greenwich, CT, company's interactive efforts.