Measure for measure Nov 1, 2007 12:00 PM
, BY KEN BURKE
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Think the traditional means for measuring print catalog performance — square-inch analysis — is obsolete in the world of e-commerce? Guess again.
You might be ready to argue that simple formulas based on finite presentation space no longer hold true for online catalogs. But even with the infinite space of a Website, it's still important to maximize real estate.
In print, catalogers analyze for optimum page count and density, forcing hard line decisions around item and SKU counts, says Judith Roberts, president of e-commerce consultancy Estrategyfirst. “The point at which items could no longer support their advertising costs was clear. Online, with the lower per item presentation cost, we can generally keep more items — so our challenge is how to keep them organized in a way where customers will see and find them,” says Roberts.
There are other similarities, Roberts points out. “Using squinch for print analysis, we made sure that items were worthy of placement in highly productive locations, such as covers, inside spreads or as large features.”
Online, the rules don't change. Web merchants must make sure they look at lift and sell-through when items are on the home page, called out in banners and links, and when represented in key cross-sell and upsell locations, she says. “Like the smart cataloger, a savvy online merchant knows what lift to expect with this extra merchandising boost and will quickly replace items that don't merit the extra space allocation.”
That's not to say there aren't differences in Web vs. print. The increased complexity of product discovery online makes the process of evaluating performance more difficult in some ways and easier in others.
On the one hand, shoppers navigate through products on paths that vary infinitely; on the other hand, more data are available than ever before to map those paths — and maximize their earning potential.
Another powerful upside? There's no need to wait months or even quarters to see results. “Online, we can more easily dedicate virtual page space to testing — especially the impact of creative changes or category and SKU extensions — and measure and respond very quickly,” says Roberts.
The first step is a robust analytics package that tracks not only clicks and hits, but chronicles shoppers' journeys through the site from arrival to checkout. Software providers such as Omniture and Coremetrics offer in-depth reporting, and even free provider Google analytics provides deep insight into data. Budget is no excuse: It's crucial to invest in analytics if you want to quantify your site's success.
CLICK MAPS ARE KEY
In print, we measure a single page's profitability in terms of product revenue vs. cost. Online, the equation is more complex, with some links leading indirectly to sales. The key to keeping track is the click map — an analytics tool that maps where on pages shoppers click most, and which clicks generate revenue.
For example, a click map may use shaded overlays to highlight popular page regions, with the deeper red areas signaling links that receive more traffic. For each region, the map may list not only the number of clicks, but also the amount of revenue and revenue per click, as well as units and orders.
But click maps don't merely track sales tied to merchandise; they also reveal indirect revenue — a feat impossible in the print world. For instance, a click map might show that shoppers who clicked the “customer service” link at the top — which leads to a page that has no merchandise on it — ultimately went on to place orders; the customer service link is credited with a portion of that revenue.
Click maps offer concrete evidence of the power of effective content, from customer service and shipping information to consumer reviews, in-depth product descriptions, buyers guides, and other brand-boosting content.
To add another dimension to your page analysis, marry click maps to information about shoppers' paths through the site. Whereas in print it's impossible to know the exact impact of a page except as a driver of sales for the featured products, online the depth of reporting reveals the earning potential of precise paths regardless of the logic of the sequence.
But be prepared for in-depth reporting to expose new vulnerabilities and pose new challenges. The page flow report may reveal which subsections lured shoppers to explore further. But the report might also uncover a statistic not evident in the click map reporting: Of all the possible clicks from the home page, perhaps the second most common behavior is to leave the site altogether — failing either to engage or to purchase.
The site owner then faces a challenge: Adjust the array of navigation options, merchandise, and promotions in an attempt to decrease that bounce rate — without alienating the majority of customers, who are successfully navigating to products of interest.
Despite the caveats, developing a baseline page rate for your site is crucial.
Start with a few key pages. Data from industry researchers and scores of merchants show that the following are your e-commerce site's “hot spots”:
