Use Your Website to Leverage the Silver Cloud Behind High Gas Prices

Several key factors at work right now in the socio-economic mix will have an impact on your online sales conversion rates: greater broadband penetration, high energy costs, tight consumer wallets, and more people experienced in Web purchasing than ever before.

For instance, some 72% of homes now connect to the Internet from high-speed lines, up from 57% one year ago, according to new data from Nielsen//NetRatings. And according to the Pew Internet and American Life Project, between March 2005 and March 2006, the percentage of U.S. residents with broadband connections jumped 40% to 84 million.

Meanwhile, energy prices have soared at least 30% during the past year. A Consumer Reports National Research Center survey found that 42% of consumers “strongly agree” with the statement that they will drive less to save gas. Supporting this conclusion is a report out from the Consumer Conference Board stating that more than 50% of all consumers plan to make fewer trips to the mall, and 30% plan to do more shopping online. In addition, a third of consumers expect to cut back spending overall to compensate for higher energy costs.

What does that mean to you? I would say that the above scenario means greater opportunity for online sales. But don’t take my word for it. Forrester Research believes that online sales in 2006 will increase 20% from last year, to more than $211 billion.

This is the silver lining to two clouds that hang over merchants. One cloud, of course, is that consumer wallets are being squeezed by high energy prices. The other cloud—the one that you can actually do something about—is that online shoppers are largely dissatisfied with the online shopping experience.

This dissatisfaction is apparent online sales conversion rates, which are frankly dismal. Typical online conversion rates hover in the 1%-5% range. If you were a brick-and-mortar store with a similar rate, 95-99 out of 100 store visitors would be leaving your premises without spending a dime.

Why do so many online shoppers leave e-commerce sites? The short answer is that they didn’t see what they wanted fast enough. Twenty percent of respondents to a survey reported by Retail Forward said they feel frustrated when they can’t find what they are looking for on a Website. Another survey reported in the news shows 55% of consumers said a frustrating online shopping experience negatively affects their overall opinion of that merchant.

To capitalize on the forces that will lead to an increase in online sales—in other words, to ensure that your Website gets at least its fair share of the overall boost in online spending—you need to make sure your site is fast, easy to use, and informative.

Think of your Website as a shopping flier with a “buy” button. Wouldn’t you like to be able to browse a catalog or shopping flier, see what you like at the price that appeals to you, and then just click to buy? By posting on your site Flash versions of your print catalogs you enable shoppers to do just that, by giving them the ability to zoom in, take notes, and compare products quickly.

But posting a virtual catalog is hardly the only way to improve online conversion rates. Another is to make sure you serve up information the context that the consumer is asking for. Nothing is more frustrating to site visitors than searching a site and receiving pages of results, 99% of which are a waste of time…and a reason to exit your site

While you’re at it, make sure that your purchasing function is clear and easy to use. Make your pricing very clear, without extra steps for shipping costs and taxes. Have the customer fill out credit information after he has made the decision to purchase and is satisfied with his choice.

Talk to your customers before they make the final decision. Use an automated pop-up to give them the option to ask a question or have their purchase details saved on your site for easier access in the future.

Give customers the opportunity to leave feedback about their shopping experience so that you can help them better next time. Also, use a reporting tool to determine what customers were searching for and where they spent the most time on your site so that you can stock items that they wanted but didn’t find or offer them something similar while they are still on your site.

Take the above steps and I guarantee your online conversion rates will grow into the double digits and you will be able to make the most of the silver lining behind the clouds.

Moshe Ofer is CEO of ActivePoint (, a maker of contextual e-catalogs and reporting tools for e-commerce.

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