Give Window-Shoppers Reason to Buy

In the Internet era, we still exhibit a powerful preference for window-shopping over actual buying — even if our window takes the form of a computer monitor.

Perhaps the biggest challenge facing e-tailers today is look-to-buy ratios. Too few shoppers click through a transaction to fruition. Data from online shopping sessions reveals that browsers became buyers 19 percent of the time. Roughly, one of every five online window-shoppers actually makes a purchase. Converting clicks to buys is the real indicator of e-tailing success. So how does the savvy marketer transform reluctant shoppers into enthusiasts?

The conventional answer is a careful examination of demographic segmentation. By knowing a target customer’s location, age, income and educational levels, bricks-and-mortar merchants — and even ubiquitous chain stores — can adapt their marketing strategies to suit the profile of shoppers in a given community. But when an established retailer adds a dot-com to its name, it discovers — in common with Web-only e-tailers — that traditional demographics no longer fully define the playing field.

Shopping and window-shopping habits here are shaped more by consumer beliefs, opinions, interests and concerns than by age-old issues of age, geography and even income. In today’s complex and ferociously competitive cyber age, e-tailers now need a keen understanding of psychographics to reach the minds and hearts of their customers.

Although barely out of its infancy, online shopping has matured to the degree that buying patterns and customer types are already coming into sharper focus. Differences in attitudes and behaviors among the estimated 120 million who shop via the Internet have emerged and are measurable.

As might be expected, motivations, mind-sets and spending habits fall roughly into broad demographic groups: Women have stronger ties to the mall than men; youthful shoppers are more confident with the concept of e-tailing than older people. But the issues are far more complex. Demographics sketch only the outlines; psychographics fill in the colors. Retailers must understand the emotional reasons people shop if they want to make buyers out of browsers.

This is clearly a good news/bad news story for traditional retailers and new-era e-tailers alike. The good news is that retailers don’t need to forget everything they thought they knew about customer targeting; demographic analysis still has a place. The bad news is that merchants online and offline may indeed fall short unless they quickly become attuned to psychographics and learn to monitor these new cues vigilantly. Thankfully, measurement is part of the warp and woof of the Internet.

Finding out what the consumer wants and targeting that prospect are among the most basic tenets of merchandising. Lacking personal contact, how can the Web merchant make that assessment? Research is a major component of the solution. Most e-tailers know which products and services are moving and which aren’t.

Knowing what people are buying, though, is only part of the story. Merchants need to know who is and who isn’t buying, and why. By carefully analyzing data from their own sites, conducting online surveys and questionnaires among their customers, and keeping abreast of published studies, online merchants can begin to recognize shopping personalities that are constant and predictable.

This research must be continual: As increasing numbers of potential consumers are logging on, we can expect the population of shopping types and their behaviors to evolve. If trends continue, however, we certainly can anticipate a growing number of browsers who are initially uneasy with the cybermarketplace to outpace those who have been online longer and are comfortable with the environment.

To ensure success, merchants must find a way to appeal to these expanding ranks of browsers who, although not opposed to shopping online, generally still prefer to buy via more traditional venues. E-tailers must provide answers for these reluctant players: What entices them into the cybermarketplace? What repels them? Does the Net provide a satisfactory alternative to offline shopping? What do they believe the Web can offer that offline shopping cannot? What are their fears and concerns?

For shoppers for whom time is an issue, merchants will make their sites quick to load and refresh, and will provide effortless checkout procedures. For shoppers who express concerns about privacy and security when shopping online, e-tailers will place a special effort behind assurances that using a credit card on the Web is no more risky than using one at the mall. For those who want to touch, taste and smell before they buy, merchants will provide popular brands of commodity goods. For those who respond to pricing, merchants will reward them with incentive programs. Companies that truly understand who consumers are, how they think and how they act, will target consumer segments appropriately and maximize their customers’ lifetime value.

It’s not that demographic information isn’t interesting or valuable. Demographic profiling is increasingly prevalent and, by turns, useful. But if e-tailers are to encourage window-shoppers to take the plunge and buy online, it behooves them to acknowledge the powerful role of cyberpsychographics. There are real, discrete behavioral patterns within online shopping, centered around the preferences and nuances of shoppers. Heeding this data will enable e-tailers to create environments that respect these intriguing differences.

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