It’s no secret to marketers that promotions attract customers. Once customers arrive, however, many Web sites drive them away by making the shopping experience too difficult. The result? Confused customers and lost sales.
In recent tests of eight major e-commerce sites, Creative Good found that customers respond favorably to well-executed promotions. Here are promotion and merchandising tactics that the tests showed to be most effective, including several examples of how sites may be losing sales by hiding good offers or by making them hard to use.
Promotions, like other areas of e-commerce sites, are most effective when they are presented clearly and are easy for customers to use. “Promotions” here means monetary offers or discounts that are not tied to specific products, such as offering 10 percent off a customer’s first purchase.
The most effective promotion was on the home page of Gap.com. It enjoyed a 50 percent click-through rate in the tests.
Gap.com’s prominent and straightforward promotion — $100 Gets You $20 — appealed strongly to shoppers. Consumers immediately understood the premise of the promotion: a $100 purchase would get a $20 Gap ShopCard good toward the customer’s next purchase. One shopper said, “I would do this. A hundred dollars gets you $20. I would definitely check that out.” Another noted that it would be “easy to spend $100” shopping at the Gap, and thus the promotion was attractive to her. Half of the customers who saw the promotion clicked to see the details.
Though the promotion drew a high click-through rate, more than one customer had trouble taking advantage of the promotion. The page took so long to load that one customer left the site entirely. Frustrated, she said, “If it’s going to take so long, what’s the point? It’s just a special offer.” Another customer said that it might be easier to drive to a nearby Gap store than to go through the online promotion.
The Gap.com campaign offers two lessons about promotions:
• Display promotions prominently and explain them clearly.
• When customers click into the promotion, make it quick and easy for them to take part in it.
These are basic, common-sense guidelines, but as shown in the tests, many top e-commerce sites aren’t following them. Following the simple rules mentioned could improve revenues substantially.
Good promotions, poorly presented.
Landsend.com provides an example of not following the rule of presenting promotions clearly:
During the checkout process Landsend.com asked customers whether they wanted their wool pants to be hemmed at no extra charge. Customers were happy to learn of the free hemming offer, but multiple customers said that they would have liked to have known about it earlier in the shopping process. Landsend.com does not promote its free hemming anywhere else, such as on the product page. As a result, it may be losing potential sales by not making the free hemming offer more prominent.
In addition to improving promotions, sites can enhance the customer experience by merchandising products more effectively, meaning featuring products in a special manner (on the home page, for example) distinct from the site’s standard product listings.
Featured products were particularly important on the toy sites that were tested, such as eToys.com and KBKids.com. Adult customers shopping for children were especially eager to get gift suggestions. This was particularly true when customers shopped for other people’s children and had little idea of the children’s preferences.
KBKids and eToys let customers shop by age as well as by category. In the tests, almost all customers shopped both by age and by category within a single session. Providing multiple ways to browse was helpful to shoppers eager to find gift ideas.
EToys customers who shop by age for a 5-year-old see a well-rounded page that offers customers more than a dozen product or brand suggestions. The suggestions range from brands (Lego and Barbie) to categories (“books they can handle”) to situations (“Plan a Stress-free Playdate”). Because the product suggestions were prominently and clearly displayed, several customers in the tests clicked various products on this page. EToys’ shop-by-age page is an example of thoughtful and varied merchandising.
The following tips will help you learn about promotions and merchandising:
• Well-executed promotions and featured products appeal to shoppers and can increase revenues.
• Communicate special offers clearly and early in the buying process.
• Use brands, categories and situational merchandising to suggest products to customers.
• Aamir A. Rehman is a consultant at Creative Good, New York, a consulting firm specializing in improving the online customer experience. Reach him at [email protected]