What's Really Surprising About E-Tailing? No Surprise

This week, in a column titled “Some Online Retail Surprises,” New York Times columnist Bob Tedeschi reports some pretty obvious things, but they genuinely surprised the e-commerce industry. Why would they find the fundamentals of human persuasion so astonishing?

Tedeschi writes (emphasis added):

The Internet research firm comScore Networks plans to release its list of the 25 highest-selling Web retailers for May today, and the usual suspects figure prominently.

Dell.com ranks first, with almost double the sales of Ticketmaster and Amazon, which rank second and third. Office Depot, Sears and Victoria’s Secret also rank high.

More surprising, perhaps, are some of the less publicized e-tailers that rank relatively high on the list — like Staples’s Quill.com and Alticor’s www.Quixtar.com, which are fifth and sixth, and Spiegel’s Newport-News.com, which ranks behind only Victoria’s Secret among online apparel sellers.

That each of these companies has crept into e-commerce’s upper echelon is a testament to the distinct approaches they have taken to selling online.

Here are four Duh! Moments to reflect on.

Duh! Moment No. 1

“Less publicized” retailers such as Quill and Quixtar are both well known indeed and have established offline customer bases. Many other established offline companies have done well with an online sales channel. Several are on that list.

Quill had the good sense to realize buying online is not easy. Why aren’t other retailers making the effort and long-term investment to train customers on how to use their site?

Quixtar is an Amway division. Amway has been perfecting the technique of person-to-person marketing, or multilevel marketing, since 1959. This multibillion dollar behemoth knows how to motivate distributors. I don’t think 3.3 million distributors qualify them as “less publicized.” They teach their people how to shop the site, one person at a time.

Duh! Moment No. 2

Quixtar’s “unusual Ditto-Delivery” feature is credited with the site’s success. What’s unusual about an auto-ship program for consumable products? Subscription services such as AOL and Gevalia Coffee do the same thing. It’s common knowledge about 70 percent of people never cancel a standing order. This is a natural feature for the Web. The surprise isn’t the feature, it’s that this would come as a surprise to anyone.

Duh! Moment No. 3

Most of Quill’s customers “generally know what they want before they type in the Web address,” according to VP Sarah Alter. I’ve written about the four types of Web visitors in the past and identified this type of visitor. All visitors need is a way to find what they want and a way to complete their purchases easily. Isn’t it more surprising this Web site has the highest “reported” conversion rate on the Web when it converts only about 40 percent of customers, even after they’ve been trained to shop their site? The visitors aren’t browsing. They aren’t looking for fashion or pet grooming supplies. They’re looking to buy merchandise Quill is known for: office supplies. Is Quill out of stock or uncompetitive on 60 percent of its 50,000 items? Do 60 percent of its inbound telemarketing sales calls result in no sale? Quill does a great job online but has a lot of work ahead of it.

Duh! Moment No. 4

Newport News has a distinct approach to selling clothing online. It decided fashion is purely an impulse business and it would rely heavily on presenting goods fashionably, within the context of a theme. Recent extensive research about categorization and conversion rates in the apparel industry shows it was among the worst performers.

Imagine how surprised I was when I read CEO George Ittner said, “People don’t just wake up and say, ‘I need a red short-sleeved dress.'” I don’t buy dresses because I just don’t look good in them, but I woke up this morning knowing I need to replace a pair of navy blue, all-season wool pants. That’s how I buy. It doesn’t mean that everybody buys the same way.

What’s the scoop on Newport News? Does it have a good site or a bad one? It depends. No, I’m not hedging. Every shopping experience starts when people commence the buying process. They recognize a need or want, then seek out a solution. The way they express that solution depends on subject matter, level of need, their awareness of alternatives, and countless other influences.

At some point, they need to attach a noun to that solution. That’s a categorization problem. You see, all poodles are dogs but not all dogs are poodles. Information architects believe you can categorize everything perfectly, given time. That’s nonsense, and mostly it’s technical people who believe it. Humans categorize from the bottom up. Databases don’t work that way. You need to anticipate the logic and emotion potential buyers use in advance and present it in a way that grabs their attention, piques their interest, stimulates their desire, and propels them to take action. That’s why Newport News can be a horror to a visitor looking for something specific but a great site for visitors not sure of what they want or who know approximately what they want.

The fundamentals of persuasion shouldn’t be surprising. What’s surprising is so many multimillion dollar Internet marketing budgets are blown by people who don’t know (or maybe don’t care) the answers to the problems they have are readily available. I’ve discussed the buying process, the four types of visitors, information architecture, navigation, and categorization many times. I don’t conduct primary research, so everything I say comes from publicly available sources.

What’s really surprising? People who keep trying to reinvent the wheel.

Meet Bryan at ClickZ E-Mail Strategies in Chicago on Thursday, August 8.