Window shopping

Delays are frustrating, and none more so than those of the shopper who dithers for weeks before buying or walking away empty-handed. This “just looking” behavior is highly prevalent on the Web, according to a new report, “A New Era of Digital Window Shopping,” published by security auditing company ScanAlert. Retail sales data gathered from more than 130 companies between June 2004 and March 2005 reveals that the average consumer took just 19 hours to make a purchase after a first visit to a Website. Thirty-five percent of shoppers took more than 12 hours to buy; 21% dawdled for more than three days, with 14% of this supercautious group taking more than a week to decide where to buy.

One of the reasons for this lengthy window shopping, notes ScanAlert CEO Ken Leonard, is that online shoppers have learned to use shopping carts for comparison shopping, clicking in and out of a number of sites and abandoning carts at whim. They do, however, return to buy from the site that scores the highest on four main criteria:

Price and availability

Is the product exactly what is desired? Is it the model/color/design preferred? What are the added shipping costs? How does the total item price compare to that on other Websites?

Safety and trust

Can the company be trusted? Will it send the product quickly — or at all? Will the firm take care of any returns or warranty problems, and will credit-card and other personal information be safe on the site?

Shoppers are also more likely to purchase something when they see security certification marks or seals on sites. In an A/B-split test, says ScanAlert, the conversion rate increased 14% for consumers who saw its certification mark. Consumers who take the longest time to make a decision are also the most concerned about Website security: ScanAlert’s certification mark netted up to 20% higher conversion rates for shoppers who delayed their purchases for more than three days.

Based on these results, Leonard offers two key recommendations for converting shoppers into buyers. The first and most important strategy, he says, is to create a “comfort zone” for comparison shoppers. Since the survey data show a strong correlation between risk aversion and time spent considering or researching a purchase, merchants should emphasize site security and address privacy issues in a prominent place on every page. This will increase the likelihood of cautious shoppers returning to make a purchase.

The second tactic is a more unusual one. Leonard says it is essential to shift the sales focus from shopping cart abandonment (a longstanding problem, with 50% or more of online carts abandoned) to site abandonment. Shoppers tend to use the add-to-cart function as part of their comparison shopping strategy — they simply abandon the cart when they move on to the next comparison opportunity. To encourage shoppers to return and buy, online merchants must convert carts into convenient shopping tools. One way to do this is by creating a saved-search function whereby returning purchasers can easily pick up where they left off.

Window Shopping

X-box or XP? For the average consumer, the choice is obvious. But for retailers, the next big thing in the systems arena may well be Windows® XP Embedded, Microsoft Corporation’s powerful, retail-oriented operating system. The platform allows developers and systems integrators to build full-featured POS devices that connect seamlessly with current and future back-end IT infrastructure. Target Corp. is one of the latest businesses to adopt XP Embedded for its POS devices nationwide, scheduling it to run on registers at Target, Mervyn’s, and Marshall Field’s stores by the first quarter of 2003.

XP Embedded spearheads a fresh arsenal of retail offerings from Microsoft. Although retail applications aren’t a new venture for the technology behemoth, only in recent months has it put major muscle into expanding its presence in the area. According to Gary R. Cooke, Microsoft’s industry manager for retail and hospitality, the company “has worked in retail since 1994, but it was spread around in different pockets.” Starting in July of this year, he says, Microsoft will develop a retail-specific consulting organization. In the new initiative, the core technology comes from Microsoft, “but the technologies that retailers will get excited about come from our partners.” JDA Software Group Inc., for example, will jointly develop and market one of the first Microsoft .NET-enabled suites of applications for the retail, wholesale, and consumer packaged goods industries.

“Everything we do today is based on XML and on the .NET Framework,” says Cooke. “The .NET Framework is a set of enabling technologies that allow different applications from different vendors to work together. Retailers don’t want to throw away everything they already have to take the next step.”

Microsoft’s goal is to enable retailers to achieve what they’ve been talking about for a long time — to become “one organization where all information is available in one place,” says Microsoft industry technical strategist Ernest Mindlin. A Microsoft application such as BizTalk Server, for instance, allows communication between businesses, such as retailers and suppliers. But a fully integrated enterprise is still out of reach for many merchants. Mindlin believes .NET will change that. “Everyone is using XML in their own little way,” he says. “There’s not as much of a savings as there could be. With .NET, the cost of doing business will change.”

It appears to have done so already for Marks & Spencer, a 300-store-plus clothing retail chain in the United Kingdom. On top of a BizTalk Server-based system, the firm recently installed Microsoft’s Visual Studio .NET to automate a fraud protection program. Real-time transaction tracking across multiple business units became possible. In the first few months of operation, the XML-based system enabled the retailer to transmit 700 documents per second, far greater than its goal of 250. According to Marks & Spencer, fraud has dropped by 10% and support costs by 19%, with the investment expected to pay for itself before the project is complete — a huge win in the retail game.