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Lessons From The FrontAshford.com on marketing by Nigel Fenwick | |
Continuing our series of lessons from Internet retailers at the forefront on online merchandising, I talked with Mary Lou Kelley, Vice President of Marketing at Ashford.com, about Ashford's experiences on the Net. Our conversation is summarized in this "Lessons From The Front."
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Ashford targets the group it has called e-Powered Buyers. The company estimates that this group has some very desirable characteristics: 100% shopped online in last 2 years, 70% spent over $250 online last year, 70% intend to buy luxury goods online next year and the group's estimated annual consumption of luxury goods totals $15 billion in U.S. alone.
From its analysis of these e-Powered Buyers, Ashford has identified a number of factors that affect their business model:
Brand selection critical
Product category breadth provides ability to capture larger share of spending
High interest in unique products indicates an opportunity to build new brands
Outstanding customer service is a requirement
The e-Powered Buyer needs to feel they are getting good value
Having identified its target customer, Kelly works religiously on getting these consumers to their site. Using online marketing, they test, cut, test and then expand their marketing efforts, focusing relentlessly on customer acquisition costs. For offline marketing, the company tracks the media consumption for e-Powered Buyers as a guide to how well they are targeting their offline dollars.
Delivering to the target segment's expectations
Kelly applies a simple strategy when it comes to meeting the expectations of her target customers: "give them what they want and make it delightful." However, this translates into complex marketing activities:
Product assortment
Know the products, brands, price points and offers that converted target segment browsers into buyers on their first purchase
Track searches conducted by the target segment to identify sought-after products and measure in-stock performance versus search topics
Customer Experience/Service
Share their passion - exceed expectations
Affirm consumers' expectations of the site's knowledge base (but make it easy to bypass)
In any case - make the experience frictionless
Up-sell
Through collaborative filtering of other consumers in the target segment, offer alternate products on the product detail page. This is an opportunity to focus on higher margin and/or long on inventory products, however it must be perceived as adding value
Cross-sell
Offer ability to view products that appealed to similar consumers
Offer impulse items at check out
Value
"I can shop anywhere. I'm for what I buy, not where I shop." Give the customer perceived value.
Keep Ahead of Your Customers' Expectations:
Integrate follow-up opportunities into the buying process:
New products from the same designer or brand
Post newsletter subscription on every page of site
Keep your most important segments involved in your company:
Random acts of delight
Provide unique opportunities based on their interests, e.g.web cast with designers, watch school
Offer preferred services:
Early access to new products and/or sale products
Priority in back order queue
Upgrade shipping or other standard services
Monitoring performance and be willing to change
Perhaps the biggest challenge and the biggest opportunity for any eRetailer is the vast mountain of detailed information that is available from click-stream data, (data on how visitors to a site move through the site's pages, where they came from, where they go and where they leave).
According to Kelly, there is so much data that the challenge is determining how to focus on the things that will drive improvements in the business. It's possible for marketing managers to be presented with complete data overload; "we'll get a report that's about a hundred pages long on site traffic every week," says Kelly. "How do you distill that down into something that is actionable, something that has the key metrics that you really need to track?" Kelly focuses on how to get the most important information from this mountain of data. "We look at it on a weekly basis at a high level, analyzing how people navigate through the site." Some of the things her team looks for include:
How many people arrive at the home page.
How many arrive at a department.
How many go from the home page to a department.
What percentage do they take through to complete an order.
Where did they leave the site.
"We identify where we need to hold on to people better," says Kelly. Since Ashford offers nearly fifteen thousand products Kelly only gets to know the areas to focus on at a very high level.
When Kelly looks at traffic, she is looking to see if they are getting the right traffic based on their target market. Ashford tracks overall brand awareness through research and customer surveys. "When they get to the site it's all about conversion rates; we look at abandon rates on single page views, on search words; we look at it by department, by shopping bag. We delve in deeper talking to customers about issues in those areas, and if someone abandons a shopping bag, why did they abandon it, what is driving that, what can we do to improve that. It's always about constant improvement."
Ashford's analysis of abandoned shopping carts led them to conduct in-depth research with consumers to find out why they might be inclined to abandon a cart after they have spent the time to get to that point. What they discovered was:
Where products are frequently small, expensive items that might easily go astray, customers were concerned about receiving the product.
Even though Ashford's customers are predominantly experienced Internet users, they found that security of credit cards transactions and return policies were still very, very important to their customers.
Many customers believe the product will still be in their shopping cart when they come back, and they just want to put the cart aside and come back later to complete the order.
Some customers simply did not realize they had not completed their order because they had not pressed the order confirmation button.
This resulted in some key changes:
Free overnight express shipping to reduce concerns about products going missing.
Reinforced messages about online security to consumers throughout the shopping cart process to help shoppers feel comfortable with making a large value purchase online.
Ensuring customers can return to abandoned shopping carts at a later date to complete their purchase.
Increased visibility of the order confirmation process to reduce accidental abandonment of carts.
One problem for online merchandisers is the fact that they often need to present a vast assortment to a customer. Presenting a shopper with a selection of 6,000 watches would probably scare away all but the most decisive visitors. So effective online merchandising, according to Kelly, is about making the shopping process as self-selecting as possible for the consumer. This means letting those customers who know what they want find their chosen product extremely quickly. For those shoppers who want to browse, offering tools to narrow down the selection without making the process overwhelming, presenting the assortment a few at a time to help them find what they like as quickly as possible.
Thanks Mary Lou!
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