ROI and website metrics frustrate e-tailers

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By: Wise Marketer Staff |

Posted on June 14, 2003

As many as 14% of retailers are unaware of online customer conversion rates, and 43% can't cite shopping cart abandonment rates, according to a recent study, 'The Merchant Speaks', from the US-based E-tailing Group. The study shows that many e-tailers are frustrated by the difficulties of website metrics and ROI measurement.

The survey, by The E-tailing Group, which provides e-commerce consulting services for online retailers, shows that using e-commerce to drive bottom-line results remains a top merchant priority. However, implementing the improvements necessary to address those priorities is often difficult in the current resource-constrained climate.

As e-commerce has become a more mainstream activity over the past few years, many retailers and catalogue merchants that are now selling online have been faced with the challenge of adapting legacy software and systems, often from companies that did not survive the technology market downturn.

Measurement needed
Based on feedback from more than 200 senior executives who completed the e-tailing group's questionnaire in the first quarter of 2003, it seems that retailers are faced with an ever-increasing need for more relevant statistical measurement to justify their return on investment (ROI) in merchandising and marketing. Many, however, find delivering those metrics to be a costly challenge, according to the survey.

"Merchants are investing in the tools that help customers efficiently find what they want, and to enable smart browsing, timely and targeted communications, and simplified ordering," explained Lauren Freedman, president of The E-tailing Group.

"But many of the sites are now in need of platform upgrades or new servers. Others are bolted together with a mixture of proprietary legacy systems and off-the-shelf software solutions. Either way they are forced to invest in improving their backbone before they can even consider other initiatives," added Freedman.

Main metrics
Site activity, traffic volume, and sales are still the primary measurement tools for 84% of the sites surveyed. While some e-commerce metrics are being analysed by retailers, most are not.

The fact that 14% of respondents could not identify customer conversion rates and nearly half (43%) could not provide shopping cart abandonment numbers indicates a need for better measurement and reporting structures.

Rethinking e-mail
With the large volume of 'spam' (unsolicited e-mail advertisements) that flies around the internet every day, many e-tailers are reassessing e-mail and sending fewer, but better targeted, messages to their key customers.

Some 80% percent of respondents use e-mail for store or product promotions, and 70% use it to highlight full-price products or seasonal messaging.

Merchant priorities
The retailers also reported on their top three technology initiatives for 2003: First came platform improvements (such as new servers and upgrades), followed by order processing systems (including order management, history, invoicing, and confirmations), and finally performance enhancement (such as web site look-and-feel, page redesign, and navigation improvements).

An electronic executive summary of the report has been made available for download from E-Tailing Group's web site.

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