A shopping experience
Marketers and business people often forget how they behave in business or shopping situations. We, marketers, all know a lot of theories, best practices, statistics, and certainly we all have a lot of hopes that complicate our view of the reality.
Let's have a look at how an ordinary person shops online. Then, we will discuss some marketing issues around that.
How I shopped for a new product
Recently, I decided to buy a new weighing machine. In our country, we have an excellent product comparasing website called Heureka. Plenty of products, reviews, specifications, images - everything you need to make a good buying decision. I have decided for a particular model, and clicked on "Compare prices".
Price comparison always amazes me, because there is a huge difference among the online stores. Certainly, I don't want to spend more than necessary, so I sorted the offers by price and chose the first, least expensive, offer that is in stock. Luckily, the least expensive was not only in stock, but for my chosen model of weighing machine the shipping was for free. I orderred the product.
Price comparisingThis is where it gets interesting. I bought the product for 2,299CZK ($96) with free delivery. Great deal! However, the most expensive offer of the exact same product was 5,303CZK ($221) - 130% more expensive!
Would you, under any circumstances, be loyal to the most expensive store? Let's even consider you have already had a great shopping experience with them. The answer would be: most like not. Why would anyone want to pay double the price for the same product? I don't have a good answer, if you do, please share with us in the comments :)
Marketer's point of viewI can imagine an online marketer sitting at their web statisctics and thinking why this product is not being sold well (or maybe even not at all). He might think of many "best practices" and marketing tricks such as discount coupons, social media contests, Facebook ads, etc. In fact, nothing will work, because the price is way too high. On top of that, the comparising web site, where people make their buying decisions, has all the competitors' prices listed.
Customers are not lazy to search for information! Nowadays, the competition is really tough. On top of that, people love using comparising and review sites. An average customer wants to make a good buying decision, hence they spend some time searching for the information; they compare products, read reviews and ask questions online. Then, they choose the best offer. Unfortunately, who the seller is makes almost no difference. I can confess, that I am not loyal to any of the online stores. Best price and fast delivery always wins.
Will advertising help in sales?
One of my clients built his ecommerce business using comparising sites and he did very well. The traffic was particularly good with conversion rates 4-10%. This number is quite high, because the comparising web sites already drive you people ready to buy. It is hard to imagine a search engine can compete with that.Experiment with an e-commerce website My client decided to test search engine ads. The price per click was reasonably low, the traffic coming in was very engaged - around 10 pages seen per visit on average; over 5 minutes spent on the web site on average. Very nice engagement numbers. However, the conversion of this traffic remained less then 1% regardless of the engagement. Apparently, our campaign broght people searching for information. Only a small fraction of them was ready to buy. I assume, most of them ended up on the comparising sites anyway. The result of this campaign was a negative immediate ROI.
Online advertisement is extremely competitive and expensive. A positive ROI can be achieved only after some time, if you properly collect email address and have a powerful email marketing. However, this is very difficult to track, and most business owners would not have the necessary patience and will to experiment.
What can help marketers win the deal in e-commerce?
Marketers and e-commerce business owners have to accept hard facts. Price is extremely important! Especially in the situation when there is no additional effort for the client to choose the less expensive product. Facebook, contest, flyers, emails will not make any difference.
"What particularly matters for most customers is the seller's reputation. If we can choose 30 different stores to buy from, why would we decide for someone with poor reviews? Nobody wants to risk a negative experience. Positive reviews are essential. People learned to trust them, and there are many effective ways how to filter out the fake ones. How to get positive reviews? Perfect customer service! There is no other way for building your reputation. It is very funny to see negative reviews on Facebook pages in contract with the posts of the company.