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Online Purchases Increase, But Not For Web-Only Sellers

Why that is and what you can do about it

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Overall, online shopping has not been adversely affected by the slow economy reports. But that good news isn’t extended to Web-only retailers, the majority of whom are experiencing flat or declining sales.

According to a survey by Forrester Research and Shop.org, online retail sales rose by an average of 11 percent in the first quarter of 2009 with the bulk of the increase benefiting consumer brand manufactures and multichannel retailers.

Change In Online Search Sales

The study, which examined 80 companies, found that 71 percent of consumer brand manufactures saw a sales increase in the first three months of the year, and 68 percent of multichannel retailers also saw increases. In contrast, 61 percent of Web-only merchants saw flat or declining sales.

Search-Driven Conversion Rate

Overall that’s seen as a boost in consumer confidence. Concurrent numbers from Compete show that consumer electronics search conversions are up slightly over this time in 2008 as well. So why are Web-only retailers trailing?  

There could be a number of reasons, but some seem to me more likely than others:

  1. Smaller retailers often swing the bulk of their marketing budget toward the holiday season and let up in the off-season. Plus, many companies cut marketing budgets first in tough times, but the right move, if one can afford it, is to increase marketing to find new customers and entice old ones.
  2. When money’s tight, consumers may be more likely to trust brands they know. Branding is traditionally a larger retailer’s domain while smaller shops concentrate solely on direct sales.
  3. A weak economy makes the consumer extra price-conscious and bigger retailers more aggressive for fewer available dollars. If you have more room to slash prices or better ability to incentivize, you have a better chance at capturing those dollars.
  4.  A weak economy extends the online purchase process. Another set of Compete data shows that across the board, consumers aren’t buying right away. They’re researching longer and buying later. Web-only retailers may not be adjusting the longer buying process effectively, and may less effectively retargeting customers.

Timeline of Search-Driven Conversions

There’s been much discussion in the advertising world lately on the topic of retargeting—regaining a potentially lost customer’s attention during the research or buying process. Aggressive marketers find ways to reach the consumer who clicks but doesn’t buy, who places items in a shopping cart but then bolts.

Retargeting is likely the next big focus in online media. Yahoo recently introduced tools for this purpose. Retargeting company FetchBack is bragging up to 112 percent higher ROI from its paid search retargeting technology. Another study showed that 76 percent of online shoppers want the chance to chat with a representative during the checkout process.

Seth van der Swaagh, with Google’s Retail Team, posted some advice for retailers struggling to succeed among more cautious, cost-conscious consumers. Here’s a brief summary of those tips:

  1. Choose the right keywords and expand keywords by including more generic and research-based words.
  2. Give incentive through good ad copy with charged up words like “affordable” or “great deals,” etc.
  3. Expand your conversion cookie, study your traffic data.
  4. Visiting a second time is a signal for looking to buy. Be there for them when they come back.
     
Online Purchases Increase, But Not For Web-Only Sellers
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    We found it works both ways.

    Some ppl need the hand holding and ask lots of questions. this is 50-50 as to make a sale. Just like in stores, many of these ppl are tire kickers. Some are Great and purchase.

    Most of our sales come from, ppl look at our web site, no fluff, just good products at the lowest possible prices. and they BUY.

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