E-commerce sales booming for SMBs but so are the technical challenges!
E-commerce on cheap, affordable hosting platforms is taking off in a big way in the United States with a recent Oracle white paper declaring substantial year-over-year improvements in 2011 over 2010 results.
What is even more promising, are the technical improvements in the buying experience as well as further enhancements to e-commerce channels that are pulling more and more people into the online buying arena.
With these improvements are coming additional challenges integrating mobile platforms into the mix.
“Online organizations are stretched thin to balance back-end challenges while sprinting to deliver engaging, consistent user experiences that capture more mind share and wallet share—the key investment area for 2012,” said Oracle.
And the numbers are promising with 60 percent reporting that online revenue was up over the previous year and 69 percent confirming higher total traffic.
According to Oracle 47 percent are seeing more natural traffic and 43 percent reporting higher traffic from paid search programs or search engine marketing (SEM), suggesting that search remains a main artery for most online business and that investment in a sophisticated strategy remains a focus.
Even more encouraging is the fact that online retailers are achieving higher conversion rates by as much as 46%.
Not surprisingly, shopping cart abandonment remains a major issue, with half of the respondents citing stagnant drop-off rates from those of the previous two years, with little insight into how to improve conversions.
Interestingly, a recent SlideShare presentation by Salesforce suggested a few ways to improve conversion rates including the positioning of the shopping cart on the screen.
In a recent A/B testing exercise, they found that positioning the shopping cart on the left side of the screen offered better conversions rates. The left side gained a 2.2% conversion rate while a right-side option generated a 1.3% clickthrough rate.
Their study suggests the following behavioral breakdown of a typical customer:
- Customers that know exactly what they are looking for
- Customers who have some partial idea of what they want
- Customers who have no idea of what they want and are simply browsing
Interestingly, it also reports that 60% of the top 80 e-commerce retailers have advanced picture capabilities, including zoom. The report also indicates that retailers like Amazon consider the product detail page to be the most important, which is where they drive most of their traffic.
And, not surprisingly video watching outranks many online activities including social networking. Well, to some it may be a surprise!
ShopDirect, a leading UK’s online and home shopping retailer reported that their conversation rates reached double digit figures once they added over 1500 videos onto 9 related websites.
Further, users now expect pages to load in under 4 seconds, although other studies from Google suggest that this number may now be closer to 2 seconds. Google is also expected to place page-load performance higher in the list of criteria for its famous algorithm.
Meanwhile, mobile continues to be a game changer, with Oracle reporting that mobile sales increased dramatically in 2011 to $6.7 billion
“With consumers using mobile Websites and apps in tandem with other touchpoints, 41 percent of the respondents from online organizations plan to invest more resources on the front end of mobile user experiences and integrate mobile with their back-end technology,” said Oracle.
“The success of mobile has not only encouraged organizations to continue investing in it in 2012 but has also led them to ratchet it up by hiring more employees with mobile skills and building on existing programs to find new ways to engage connected consumers.”
But it’s not all good news. The Oracle report also indicates that consumers feel the lack of back-end integration.
When the survey respondents were asked how well their customers could navigate their brand via multiple touchpoints, the results indicated that there is still much work to be done.
Oracle says only 8 percent reported an “excellent” experience, that their customers could have a consistent experience across all touchpoints; 38 percent rated their experience “good,” with two touchpoints integrated; 31 percent said their experience was “fair” and 22 percent said their experience was “poor,” with no integrated touchpoints.
Most of organization investment appears centered around these areas:
Website analytics: 68%
Email marketing: 53%
Social programs: 47%
User reviews: 45%
Content management systems: 41%
E-commerce platforms: 36%
While retailers are getting a good handle on front-end technologies, it’s the backend where the weakness lies.
“The emergence of multichannel/omnichannel/cross-channel commerce has presented many new complexities, with online retailers citing technology integration as the top pain point in their organization.”
Oracle said that amongst those surveyed, 47 percent said they have difficulty delivering an integrated experience. Different tools and different teams are driving different user experiences online, on mobile devices, within social forums, and at in-store kiosks.
“Retailers struggle to deliver the same content, product inventory, features, and overall experience optimized appropriately for their growing assortment of touchpoints.”
The report also suggests that SEO remain a big pain point for online retailers who are frequently puzzled about how the algorithm ranks product pages.
“With 70 percent to 85 percent of consumers starting product research on Google, retailers are forced to get SEO right. An uptick in video investment (27 percent of those surveyed) may be related to the latest Google update, which gives more-favorable weighting and organic rankings to sites with related multimedia content.”
The Oracle report concluded by ranking user experience as the largest opportunity to drive additional revenue. 44% of retailers will make this their top priority in 2012.
Mobile and commerce platform development investment comes in second and third respectively. Oracle reports that mobile has become a key element of doing business online, gaining as much attention as must-haves such as the commerce platform.
Social networking investment comes in fourth with roughly 35% of those surveyed suggesting they would spend in this area in 2012.
In conclusion, while e-commerce sales appear to be booming, so too are backend growing pains. It is becoming increasingly complex to factor in the different entry points for a new or existing customer, and this includes a Google search. Finally, fast loading pages on scalable Linux hosting packages look to become one of the key metrics boosting a search engine ranking for a particular product.